Nestle India stocks climbed 3% to reach an intraday high of Rs 2,614.45 following its decision to continue paying a general license fee, or royalty, to its parent company, Societe des Produits Nestle S.A. The current royalty rate stands at 4.5% of the net sales.
Nestle (India) stated in an exchange filing, “Upon the recommendation of the Audit Committee, the Board of Directors, with only the Independent Directors voting and the Executive Directors abstaining, has approved the continuation of payment of general license fees (royalty) to Société des Produits Nestlé S.A. (“Licensor”), a related party as per Regulation 2(1)(zb) of the Listing Regulations. The royalty is set at the current rate of 4.5%, net of taxes, on the net sales of the products sold by the company, as per the terms and conditions of the existing General License Agreements with the Licensor. This decision is recommended for approval by the members of the company through an Ordinary Resolution at the 65th AGM. To uphold high standards of corporate governance, including shareholder rights, the company will seek approval from members every 5 (five) years, in compliance with applicable laws and regulations.”
Nestle India’s shares have delivered a return of over 3% in the last five days. The stock has seen a rise of more than 2% in the past six months. Over the last year, it has boosted investors’ wealth by 14%, and in the past five years, it has surged by 123%.
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In comparison, the benchmark index, Nifty 50, has increased by 2% over the last five days. It has recorded a return of 12% in the past six months. Over the past year, the index has surged by 25%, and in the last five years, it has seen a remarkable growth of 100%.
