Shares of Britannia Industries fell nearly 2% in intraday trade on Tuesday amid report that its shareholders have rejected an investment proposal worth ₹5,000 crore. The shareholders of the food company voted against a resolution to authorise the board to make investments, loans, guarantees, and security of up to ₹5,000 crore in the Annual General Meetings (AGM) held last week.

Britannia Industries share price opened higher at ₹3,714, in sync wthe ith broader market, but soon pared gains to decline 1.7% to hit an intraday low of ₹3,638 on the BSE. The stock finally settled day’s trade at ₹3,660.05, down 1.12%. In comparision, the BSE Sensex closed 100 points lower at 53,134 levels, reversing more than 600 points gains in early deals.

The special resolution to increase limits for making investments, loans, special guarantees, and security was "not passed with requisite majority," as per an exchange filing from Britannia Industries on June 29, 2022.

The regulatory filing highlights that 73.35% of the total 19.60 crore votes polled supported the resolution, while 26.64% were against the proposal. The resolution received 100% support from the promoter and promoter group, while only 71.13% of public institutions and 70.86% non-public institutions voted for it. As per The Companies Act, a special resolution needs to be passed by a super majority of at least 75%, which means two-third of members need to vote in favour of it.

The shareholders of the Wadia Group company, however, passed other resolutions, including dividend declaration, re-appointment of Keki Elavia as an independent director, and remuneration to its chairman Nusli N Wadia.

For the financial year ended March 2022, the company has declared a final dividend of 5,650% i.e. ₹56.50 per equity share of face value of ₹1 each. The firm has a solid dividend history as it paid an interim dividend of 6,200% amounting to ₹62 per share for financial year 2020-21 (FY21).

For the January-March quarter of 2022, the FMCG company reported a growth of 4.96% in consolidated net profit at ₹377.95 crore, as against ₹360.07 crore in the year ago period. The total revenue from operations rose 13.40% to ₹3,550.45 crore, versus ₹3,130.75 crore in the same quarter last year. The company registered a volume growth of 5% in Q4 FY22, driven by strong execution‐led market share gains and decent progress in adjacent businesses together, despite a difficult demand environment.

Post Q4 results, YES Securities had maintained “ADD” rating on Britannia with a target price of ₹3,800, citing that ongoing time correction in the stock has made valuations reasonable. Other key positives were strong traction in cake, rusk, Winkin Cows and Nepal business. The brokerage, however, cautioned that higher input costs are likely to keep up the pressure on margins despite an improving product and category mix, more price hikes and increased aggression on cost efficiencies.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.