The naysayers to the open offer of global consumer goods behemoth Unilever Plc to hike its stake in its Indian arm Hindustan Unilever Ltd to 75 per cent got a thumbs-up with the stock hitting a fresh 52-week high witnessing a 5 per cent increase over the open offer price before easing a bit an hour into trading today.
The stock, which had closed yesterday at Rs 601 on the NSE, opened with a big gap today at Rs 624 and touched a high of Rs 632 in a clear sign that the investors felt that either the open offer price was not adequate or the stock has further upside potential and would await a further move from the Anglo-Dutch parent to hike its stake in its Indian subsidiary.
The foreign parent, which had owned 52.48 per cent stake prior to the open offer was able to raise its holding to 67.28 per cent as against its original target of increasing its shareholding in HUL to 75 per cent.
There was frenzied trading in the counter with about 19.47 lakh shares being traded within the first hour. The stock was trading at Rs 615.70, a gain of Rs 14.30, after touching a high of Rs 632, which was a new 52-week high for the stock. It is true that the stock is trading at a steep valuation and the existing investors may have been tempted to exit the counter because of the attractive price.
But the fact that the gap between the market price and the open offer price was virtually gone close to the last day of the offer and going forward, an FMCG stock with an array of brands that are market leaders in their respective segments and perceived upward potential in stock price in case further stake hike is contemplated by the parent all might have contributed to investors holding back from surrendering the stock in the open offer.