Nestle India advanced 2.33% to end at Rs 2502.20 after the company's public shareholders voted against the proposed increase in royalty payout to Swiss parent Nestle S.A..
As per the companys exchange filing, 57% public shareholders of Nestle India voted against the said proposal while remaning 43% voted in favor of the same.
As on 31 March 2024, Public shareholders held 37.24% stake in the company. The remaining 62.76% stake is held by the Promoter & Promoter Group, viz. Nestle S.A (34.28% stake) and Maggi Enterprises Limited (28.48% stake).
In April this year, the board of Nestle India had approved a proposal for payment of general licence fees (royalty) by the company to Socides Produits NestlS.A. (Licensor) at the rate not exceeding 5.25%, net of taxes, of the net sales of the products sold by the company.
The said payment was being made as per the terms and conditions of the existing General Licence Agreements. The amount would be payable in a staggered manner over the period of five years by making an increase of 0.15% per annum over the current license fees of 4.5% per annum effective from 1 July 2024.
In 2019, the company had reportedly said that it would seek approval from its shareholders every five years for royalty payments to the parent company after receiving investor and proxy firm's feedback on the issue.
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Nestlis the world's largest food and beverage company. It manufactures internationally famous brand names such as Nescaf Maggi, Milkybar, Kit Kat, Bar-One, Milkmaid and Nestea.
The FMCG major's net profit jumped 26.81% to Rs 934.17 crore in March 2024 quarter as against Rs 736.64 crore in March 2023 quarter. Revenue from operations rose 9.05% year on year to Rs 5267.59 crore in the quarter ended 31 March 2023.
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