New Delhi, March 7: The Foreign Investment Promotion Board has approved the proposal of Nestle SA of Switzerland to raise its stake in Nestle India Ltd to 56 per cent from 51 per cent. Nestle had sought FIPB approval for raising its stake through the creeping acquisition route. Industry ministry sources said the company's proposal was approved in FIPB's meeting on Monday. Nestle India's share price has seen a steady erosion during the past few weeks. The scrip, which was trading at about Rs 435 around February 10, closed at Rs 292 on NSE on Tuesday. The purchase of 5 per cent equity at the current market price will amount to over Rs 140 crore.The Nestle India scrip closed on Rs 299.50 on BSE and Rs 299 on NSE on Monday. On DSE, the scrip was a shade higher at Rs 305 on Monday. Nestle SA had written to the stock exchanges last month that it proposes to purchase up to 5 per cent of the equity shares in its local subsidiary, Nestle India by way of creeping acquisition at a price which it finds acceptable, subject to necessary approvals.
Besides the parent company, public holding in the company is around 22 per cent. Financial institutions hold about 15 per cent equity stake in Nestle India, with the remaining equity being held by the public, mutual funds and FIIs. Other Indian corporates are also understood to have a minor equity stake in Nestle India.
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