Leading FMCG maker HUL said that it has received a demand notice of Rs 962.75 crore from the Income Tax Department and will go in for an appeal against the order. The notice relates to non-deduction of TDS on payment of Rs 3,045 crore to GlaxoSmithKline Consumer Healthcare (GSKCH) for the acquisition of Intellectual Property Rights of the Health Foods Drinks (HFD) business consisting of brands as Horlicks, Boost, Maltova, and Viva, according to a recent exchange filing.
The transaction is an all equity merger with 4.39 shares of HUL being allotted for every share in GlaxoSmithKline Consumer Healthcare India
Given the strong prospects in the business, analysts expect the company to clock healthy growth of 15-20 per cent, going ahead.
For instance, two of GSKCH's OTC products -- Eno and Iodex -- command a household penetration of 9 and 10 per cent respectively in metro cities. GSKCH has already drafted a channel strategy for modern trade in collaboration with South African retailer Shoprite, where cross-category and checkout placements were identified as an opportunity to create a shopping occasion through impulse buying.
Other Health Food Drinks brands of GSK -- Boost, Maltova and Viva -- would come to HUL's portfolio by virtue of the merger, making it a leading player in the segment.
Sales during the quarter under review stood at Rs 9,357 crore, up 12.42 per cent, as against Rs 8,323 crore in the corresponding period of the last fiscal
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