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Updates found with 'hindustan unilever hul'

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Unilever reiterates India growth story Anglo Dutch consumer products company’s announcement this week to invest $5.4 billion in the shares of its Indian subsidiary Hindustan Unilever (HUL) once again reiterates the faith of global businesses in Indian economy and, more specifically, in the Indian middle class.Unilever’s plan to invest $5.4 billion or Rs 29, 000 crore, the largest ever share purchase offer in India by a parent company, is for buying 487 million shares of HUL at Rs 600 per share, a price 25 per cent higher than the average market price of the previous three months. The move clearly re-establishes the fact that foreign investors are still very bullish on India growth story. They also believe in the phenomenal purchasing power of the Indian middle class – a young and upwardly mobile population that is expected to touch 300 million in the next five years, according to a study by the National Council for Applied Economic Research (NCAER).HUL being the largest FMCG (fast moving consumer goods) company in the country with products ranging from shampoo to soap and toothpaste to tea, it is right at the top to cash in from the emerging middle class boom. No wonder, the Unilever CEO Paul Polman, while making the announcement, was explicit that the company’s strategy is to invest heavily in emerging markets and India is one of the most important countries in this basket. If successful, the share purchase will see Unilever’s stake in HUL going up by 22.15 per cent to 75 per cent.Surely, the stagnating growth in the developed economies, especially in the American and the European markets is making global players turn their focus on emerging markets like India and Unilever is not alone. In the last five years or so, many multinational companies like GlaxoSmithKline, Reckitt Benckiser, Cadbury, Kodak, Panasonic etc, have either increased their shareholding or have acquired 100 percent of the Indian company.Some observers, however, saw an additional reason behind Unilever’s move. They are of the view that the share purchase plan is an effort to drive the share price up as HUL’s shares, considered to be bluechips, remained subdued since the beginning of this year as investors were perturbed by the company’s increased royalty payout plan. Analysts also believe that Unilever’s plan to acquire more shares in its Indian subsidiary, though looks expensive, will ultimately pay off as HUL’s valuation is expected to rise steadily in the coming years. Moreover, higher dividend payouts will also flow in into the parent company. This is also the reason some market experts are advising shareholders to perpetually reap the benefit from the company’s upside and not to go for one time profit by selling out. Sounds a good advice as Indians should believe in country’s growth story more than the foreigners.
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