HUL announces demerger of Kwality Wall's ice cream biz into listed entity

Hindustan Unilever Limited has approved the demerger of its ice cream business, Kwality Wall's, which will become a separately listed entity, with shareholders receiving shares in the new company

Hindustan Unilever Limited (HUL) announced on Wednesday that its board has approved the demerger of its ice cream business, Kwality Wall’s (India) Ltd (KWIL), which will become a separately listed entity, the company said in an exchange filing.

 

Under the terms of the demerger, HUL shareholders will receive one share of KWIL for every HUL share they own. Following the demerger and KWIL’s listing, the entire shareholding of KWIL will be held directly by HUL’s shareholders. “Pursuant to the scheme, one equity share of KWIL will be allotted for every one equity share held in HUL. Upon demerger and listing of KWIL, the entire shareholding of KWIL will be held directly by shareholders of HUL,” the filing stated.

 

“KWIL will be a leading listed ice cream company in India, with an experienced management equipped with greater focus and flexibility to deploy strategies suited to its distinctive business model and market dynamics, thus realising its full potential,” the release said.  ALSO READ: HUL Q3FY25 results: Net profit rises 19% to Rs 2,984 cr, revenue up 2%

Ice cream growth strategy

HUL mentioned that the ice cream business will continue to benefit from its portfolio, brand, and innovation expertise as part of the world’s largest ice cream enterprise, helping it maintain its competitive edge.

 

Rohit Jawa, CEO and managing director, HUL said, “Our ice cream category is a high-growth business with iconic brands such as Kwality Wall’s, Cornetto and Magnum, operating in an attractive segment. The demerger will unlock fair value for HUL shareholders and give them the flexibility to stay invested in ice cream’s growth journey.”

 

Financial results

For the December quarter, HUL’s ice cream segment reported flat year-on-year revenue. As of FY24, the ice cream business generated a turnover of Rs 1,595 crore, which accounted for 2.7 per cent of HUL’s total standalone turnover.

 

The demerger follows Unilever’s global decision to separate its ice cream business. There will be no change in the shareholding structure of the demerged entity, as the share entitlement ratio has been set at 1:1.