HUL Shares Jump 11% To New Record High

Shares of Hindustan Unilever Ltd (HUL) rose as much as 11 percent on Tuesday to a new high of Rs 2,414.40 on NSE. The FCMG major is among the very few stocks that have been doing well amid the market carnage from the economic uncertainty brought by COVID-19.

Hindustan Unilever: Quotes, News

BSE 2065.000.55 (-0.03%)

NSE 2065.300.6 (-0.03%)

A likely increase in demand for hygiene and other consumer products amid the nationwide lockdown and the recent completion of its merger with GlaxoSmithKline Consumer Healthcare has made the stock attractive.

Despite the limited movement of consumers during the lockdown, FMCG products, which are being sold under the essential goods category, are in high demand. Online buying and home delivery of these products have also considerably spiked since mid-March. Profits of these companies are expected to be least affected by the lockdown imposed to curb the spread of COVID-19.

Further, on 1 April, HUL announced that it has successfully completed GSKCH's merger with itself after having secured necessary approvals. The FMCG's board also approved the acquisition of Horlicks Brand for India from GSK for Euro 375.6 million (Rs 3,045 crore).

Post the merger, GSK Plc (including Group Companies) will own 5.7 percent of the merger entity and Unilever holding will be lowered to 61.9 percent from 67.2 percent.

Under a consignment selling agreement, HUL will distribute GSK's over-the-counter and health products for 5 years (mutually renewable agreement).