Shares of Nestle India gained over 2 percent in intra-day trade on Monday, May 26, following an announcement from Life Insurance Corporation of India (LIC) regarding an increase in its stake in the packaged foods major. The stake hike, which pushed LIC’s shareholding above the regulatory threshold of 5 percent, sparked renewed investor interest in the stock. The development comes amid broader news around Nestle’s global investment plans and a mixed set of quarterly earnings.
LIC Crosses 5 Percent Threshold in Nestle India
In a regulatory filing submitted under SEBI’s Substantial Acquisition of Shares and Takeovers (SAST) Regulations, LIC disclosed that it had acquired 1,49,000 additional shares of Nestle India through a market purchase on May 23, 2025. With this transaction, LIC’s total holding rose to 4,82,24,710 shares, representing 5.001 percent of the company’s equity capital.
Before this acquisition, LIC held 4,80,75,710 shares or 4.986 percent of the company’s total equity. The crossing of the 5 percent ownership threshold triggered the mandatory disclosure requirement. Nestle India’s total share capital stood unchanged at ₹96.41 crore.
Stock Gains and Market Reaction
Following the announcement, Nestle India’s stock rose as much as 2.1 percent during the trading session to hit a day’s high of ₹2,464.50. Despite the uptick, the stock remains about 11 percent below its 52-week high of ₹2,777, which was recorded in September 2024. It had touched its 52-week low of ₹2,115 in March 2025.
The FMCG stock has seen a volatile run over the past few months. After shedding 5.3 percent in February 2025, it bounced back with gains of 6.6 percent in January, 2.8 percent in March, and 6 percent in April. So far in May, it has added another 2.6 percent, though it remains down about 2 percent on a one-year basis.
Nestle SA Makes Inroads into Indian Pet Care Market
In a related corporate development, Nestle SA—the parent company of Nestle India—announced a minority investment in Drools Pet Food Private Limited, marking its first such move in India. While financial specifics of the deal were not disclosed, the transaction follows a $60 million funding round by Drools in 2023, which included backing from LVMH-supported private equity firm L Catterton.
Drools will remain operationally independent post-investment, as per a statement released by the company. Nestle SA’s entry into the Indian pet care segment comes at a time when the sector is witnessing rapid growth and increasing investor attention.
Mixed Q4 Performance Amid Margin Pressures
Last week, Nestle India reported a standalone net profit of ₹885 crore for the quarter ended March 2025, registering a 5.2 percent year-on-year decline. However, revenue from operations rose 4.5 percent to ₹5,504 crore. Both top-line and bottom-line figures slightly beat market expectations.
The company’s EBITDA stood at ₹1,389 crore, reflecting a 3.9 percent growth from the same quarter last year. The EBITDA margin came in at 25.2 percent, slightly lower by 20 basis points year-on-year but still ahead of the 24.4 percent estimated by analysts. Margin pressures were primarily attributed to high cocoa prices.
To reward shareholders, Nestle India also declared a final dividend of ₹10 per share for FY25.
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