FPIs prune exposure in tobacco stocks over high taxes, greater ESG focus

ESG investing, or "sustainable investing" is about responsible business conduct, and cigarette firms were globally being screened out by this class of investors

Foreign portfolio investors (FPIs) have reduced their exposure in tobacco stocks - ITC, Godfrey Phillips India and VST Industries -over the past one year.

According to the shareholding pattern filed with the exchanges for the quarter ending September, FPI holding in ITC stood at 12.96 per cent (down by 2.68 per cent year-on-year), in Godfrey Phillips, it was at 10.80 per cent (down 1.59 per cent) and in VST Industries at 3.57 per cent (down by 4.27 per cent).

Analysts believe that a focus on ESG (environmental, social and governance) investing combined with high taxation on cigarettes have led FPIs