In a bold and strategic step, Hindustan Unilever Limited (HUL) has approved the demerger of its ice cream business, including renowned brands like Kwality Wall’s, Cornetto, and Magnum, into a standalone listed company named Kwality Wall’s (India) Limited (KWIL). The HUL ice cream demerger aims to unlock shareholder value, streamline operations, and allow focused growth in a high-potential segment. This move is set to reshape HUL’s business landscape while giving investors a chance to directly benefit from the promising ice cream market.
Why HUL is Splitting Off Its Ice Cream Division?
HUL’s decision is part of a broader strategic realignment. The ice cream business operates differently from its core FMCG offerings, demanding distinct strategies and operational models. With the creation of KWIL, the company hopes to:
- Bring sharper focus to a high-growth but niche segment
- Offer investors direct exposure to the fast-evolving ice cream sector
- Improve management efficiency and business agility
What HUL Shareholders Will Get Post Demerger?
Under the proposed scheme, HUL shareholders will receive one equity share of KWIL for every HUL share held. Post listing, KWIL will be entirely owned by existing HUL shareholders, making them stakeholders in two distinct listed entities.
This structure gives shareholders the flexibility to either stay invested in both or choose where to bet based on their investment strategy. The demerger is expected to be completed by FY26, subject to NCLT and other regulatory approvals.
Market Impact and Financial Snapshot of HUL
HUL’s ice cream business, while accounting for just 2.7% of total standalone turnover (₹1,595 crore in FY24), holds strong growth potential. The move reflects Unilever PLC’s global strategy to spin off its ice cream unit and mirrors similar corporate actions worldwide.
Looking at HUL’s performance:
- Revenue grew YoY by 3.02% in Q4FY25
- However, Net Profit declined 3.35% YoY and 17.19% QoQ
- The stock has been range-bound over 5 years with only a 16% return
The demerger offers a fresh opportunity for long-term shareholders to unlock hidden value, especially in a market hungry for focused growth plays.
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What to Expect Next for KWIL and Investors?
KWIL could soon emerge as India’s leading pure-play ice cream company. With regulatory nods from BSE and NSE already in place, HUL is preparing to present the plan before the National Company Law Tribunal (NCLT).
The promoter group currently holds 61.90%, while public, FIIs, and DIIs hold the rest. Once listed, KWIL will become an independently traded entity, offering a new avenue for retail and institutional investors alike.
Disclaimer: The views and investment insights provided here are based on publicly available information and do not constitute financial advice. Readers are advised to conduct their own research or consult certified financial experts before making investment decisions.
