United Spirits rose 7.20% to Rs 3,067 at 12:13 IST on BSE after minority shareholders of the company approved a proposal to make and sell brands owned by its parent Diageo Plc.
The announcement was made after market hours on Friday, 9 January 2015.
Meanwhile, the BSE Sensex was down 73.62 points, or 0.27%, to 27,384.76.
On BSE, so far 1.12 lakh shares were traded in the counter, compared with an average volume of 26,049 shares in the past one quarter.
The stock hit a high of Rs 3,142.55 so far during the day, which is also a record high for the counter. The stock hit a low of Rs 2,917.10 so far during the day. The stock hit a 52-week low of Rs 2,226 on 5 September 2014.
The stock had outperformed the market over the past one month till 9 January 2015, rising 2.81% compared with 1.22% fall in the Sensex. The scrip had also outperformed the market in past one quarter, rising 22.47% as against Sensex's 3.08% rise.
More From This Section
The large-cap company has an equity capital of Rs 145.33 crore. Face value per share is Rs 10.
United Spirits (USL) said it has received approval from minority shareholders for exclusive licence and distribution agreements with its parent Diageo, a proposal that had been defeated in a previous vote in November 2014.
USL had approached shareholders afresh at an extraordinary general meeting on Friday, 9 January 2015, and the special resolution received 76.33% votes in favour, just over the 75% required to pass a special resolution. While 99.88% of the retail shareholders voted in favour of the proposal, 25.28% of the institutional shareholders voted against it. The promoters had recused from voting, as it was a related party transaction.
The approval comes less than two months after United Spirits shareholders voting against the same proposal and nine other related party transactions.
That rejection prompted United Spirits to go back to its shareholders for approval and disclose financial details of the proposed licensing and manufacturing deal with Diageo. United Spirits said last month that the agreement will help generate roughly Rs 700 crore in estimated sales in the first full year.
The company also said it would share marketing and advertising expenses with Diageo's India unit, based on net sales. Diageo's India unit is expected to shut down following the closure of the deal.
United Spirits reported a net loss of Rs 27.83 crore in Q2 September 2014 compared with net profit of Rs 94.27 crore in Q2 September 2013. Net sales rose 8.1% to Rs 2156.54 crore in Q2 September 2014 over Q2 September 2013.
United Spirits produces alcohol beverages. The company is now controlled by world's largest spirits maker Diageo, which had acquired an additional 26% shares in USL for Rs 11448.91 crore in July 2014.
Powered by Capital Market - Live News