Majority of the shareholders of Nestle India have voted against the proposed increase in royalty payout to Swiss parent Nestle S.A., according to an exchange filing. The shares of the company inched higher in Saturday's special trading session in reaction to the development.
Shareholders with 57.18 percent of the company's shareholding voted against the resolution, according to an exchange filing by the company.
Nearly a month ago, Nestle India's board had approved the hike in royalty payout to its Swiss-based parent company. Nestle India in 2019 had said that it would seek approval of its shareholders every five years for royalty payments to parent company after receiving investor and proxy firm's feedback on the issue.
The motion had proposed that Nestle India's royalty payment to Nestle S.A. to rise to 5.25 percent of net sales over a period of five years, from 4.5 percent now. The ordinary resolution stated that the royalty payment rate will start at 4.5 percent of the net sales, and will increase by 0.15 percent each year. The company had sought shareholder approval for the next five-year period beginning July 1, 2024.
Nestle India reported a standalone net profit of Rs 934 crore in March quarter, up 27 percent from Rs 737 crore a year ago. Its revenue rose 9 percent to Rs 5,268 crore year-on-year (YoY).
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decision
.jpeg)
 (16).jpeg)
