Shares of Nestle India Ltd. jumped 3% on Saturday after its shareholders rejected the proposal to raise the royalty payout to its Swiss parent.
The resolution did not pass, with 57% of its shareholders voting against the plan, the Maggi noodles-maker said in a stock exchange filing on Friday.
Nestle India had earlier in April announced its plans to increase the general license fees, or royalty, from 4.5% to 5.25% of turnover over a period of five years. The new fee, which was to take effect on July 1, was decided to be paid in a staggered manner by making an increase of 0.15% per annum.
Nestle's stock rose as as 3% during the day to Rs 1,518.75 apiece on the NSE. It was trading 2.39% higher at Rs 2,504 apiece, compared to a 0.12% advance in the benchmark Nifty 50 as of 11:54 a.m.
It has risen 15.5% in the last 12 months. The total traded volume so far in the day stood at 0.5 times its 30-day average. The relative strength index was at 50.
Seventeen out of the 38 analysts tracking the company have a 'buy' rating on the stock, 14 recommend a 'hold' and seven suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 5.2%.
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