HUL shares gain nearly 3 pc after board gives nod for new unit

Shares of Hindustan Unilever (HUL) were trading nearly 3 per cent higher after the company said its board had approved a new manufacturing subsidiary which is expected to benefit from the new corporate tax rate.

On the BSE, the stock opened at Rs 2,216.15 and went on to gain as much as 2.84 per cent to touch a high of Rs 2,279. It was quoting at Rs 2,249.60, up 1.52 per cent, at 1150 hours.

Similarly, on the NSE, the scrip gained 2.91 per cent to Rs 2,279.70. After shedding some early gains, it was trading 1.55 per cent higher at Rs 2,249.55.

According to sources, HUL is incorporating the subsidiary to get the benefit of the new corporate tax rate, which has been reduced to 15 per cent from the previous 25 per cent for new manufacturing companies.

The FMCG major on Monday announced its plans to set up a new subsidiary, which would be primarily engaged in manufacturing activities.

The company's board has given a go-ahead to a proposal to set up a step down unit, Hindustan Unilever said in a statement.