LIC-Backed 64-Year-Old Maggi Maker FMCG Giant Rallies After Announcing First-Ever 1:1 Bonus Share Issue in 28 Years
The stock has given 11 per cent on a YTD basis, and in the last 12 months the stock declined by 4 per cent.
The Indian equity benchmark indices were seen trading firm on June 26, 2025. The Nifty 50 index on an intraday basis surpassed 25,400 mark. Amid this buoyancy there is an interesting development, which investors should take note of.
Nestlé India share price was seen extending its gains in Thursday, June 26, 2025. Nestle share price was up by 1.11 per cent on Thursday. What’s keeping the stock in buzz is it has announced its first-ever bonus shares.
The Board of Directors of the company in its meeting held on June 26, 2025, it considered and approved, issue of its first-ever bonus equity shares in the ratio of 1:1.
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This is a 64-year-old company considering a bonus issue after 28 years. Nestle India Limited is a subsidiary of Nestle which is a Swiss MNC. The company operates in the Food segment. The LIC India holds 4.67 per cent stake in this company.
Between 2015 and FY 2023-24, the company’s turnover rose by 134 per cent, recording a compound annual growth rate (CAGR) of 11.2 per cent. Profit from operations grew at a CAGR of 15.1 per cent, while its market capitalisation surged by 273 per cent. Compared to its peer group’s average organic growth of 10.5 per cent, Nestlé India achieved 11.2 per cent, reinforcing its position as a resilient player in the FMCG space.
The company’s strategy focuses on penetration-led volume growth, targeting increased household penetration across India. It plans to expand its retail footprint from 5.3 million outlets to 6 million. A capital investment of approximately Rs 5,800 crore between 2020 and 2025 underscores its growth ambitions, which includes setting up a 10th factory in Odisha.
Despite challenges in the milk and nutrition category, driven by rising inflation and stiff competition from cooperatives, Nestlé continues to maintain its margin profile. Price hikes in commodities like coffee (up 75 per cent) and cocoa (up 40–50 per cent) have added cost pressures, but strategic pricing and premiumization have helped manage profitability.
On the innovation front, the company has launched over 150 products in the last nine years. It aims to grow the contribution of new products to total sales from 6.5 per cent to 10 per cent. The focus on premium products, projected to be a Rs 7,500 crore market opportunity, aligns with rising consumer aspirations. Healthier offerings, including baby food with reduced sugar, are part of its broader portfolio diversification.
Management remains optimistic about long-term growth and is maintaining a cautious yet focused approach toward core categories. While continuing to prioritize shareholder value, the company is open to exploring new segments and potential inorganic growth avenues in the coming years.
Disclaimer: The article is for informational purposes only and not investment advice.