22 May , 2024 By : Debdeep Gupta
Shares of United Spirits Limited fell almost a percent lower at Rs 1,163 apiece in early trade on May 22, a day after the company received a notice to pay water charge arrears of Rs 345.45 crore from the Water Resources Department, Maharashtra.
It pertains to the stoppage of water supply under Section 49(J) of the Maharashtra Irrigation Act, 1976.
The Water Resources Department (Jalsampada Vibhag), Irrigation Division – Nanded (North), Maharashtra, has issued a notice requiring the company to settle its overdue water charges within seven days of receiving the notice. This notice relates to the potential suspension of water supply under Section 49(J) of the Maharashtra Irrigation Act, 1976.
The company, owned by alcoholic beverage company Diageo, says it has contested the increased tariff imposed on its Nanded unit by filing a writ petition with the Bombay High Court, rendering the matter sub judice. The company is currently in the process of responding to the notice and considering its next steps.
Despite the notice, United Spirits does not expect any financial impact beyond what has already been accounted for or disclosed as contingent liabilities in its financial statements. The delay in addressing the notice was due to the company's assessment of the order and its potential implications.
At about 9:40 am, shares of the company were trading at Rs 1,168 apiece on the NSE, trading marginally lower from the previous close on the NSE. United Spirits' stock price has just gained 4 percent since the start of the year.
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