The Hindustan Unilever scrip, on Wednesday, zoomed by almost 10 per cent to close at Rs 685 on the BSE after hitting a 52-week high at Rs 698.95. The stock witnessed a total traded quantity of 17.38 lakh on the day compared with its two-week average of 4.62 lakh.
According to market analysts, the stock of the FMCG major rallied mainly after reduction in its free-float, thanks to the recently concluded buyback offer by the company’s Anglo-Dutch parent Unilever, on July 3 at a price of Rs 600 a share.
FMCG index soars
The open offer was partially subscribed at 67 per cent and helped Unilever scale up its holding to 67.5 per cent from 52.5 per cent. The parent company, however, has set a holding target of 75 per cent.
The FMCG index closed at 7,400, up 3.39 per cent from its previous close on the BSE and ahead of all other sectoral indices.
In addition, the stock gained on the back of rebalancing in the MSCI and FTSE.
While MSCI is a global equity index, FTSE is the share index of 100 companies listed on the London Stock Exchange.
The float of the stock will increase to 33 per cent from 22 per cent in the FTSE all-world index and all emerging index from July 22. Moreover, the current float of the company in the MSCI India index reduced to 30 per cent from 40 per cent earlier with effect from Wednesday.
Kaustaubh Pawaskar, FMCG analyst, Sharekhan, said: “There was no fundamental reason behind the movement today. The stock benefited from the overall rally in the FMCG basket. Moreover, the reduction in the stock’s free float post-increase in the parent company’s stake has benefited the stock. We had seen the same situation in case of the GSK stock post-closure of its buyback offer, too.”
“The rebalancing in the MSCI and FTSE would have also added to their preference,” he added.