FMCG major Hindustan Unilever (HUL) incorporated a new subsidiary Kwality Wall’s for the proposed demerger of the ice cream business of the company.
“Kwality Wall’s (India) Ltd (KWIL) has been incorporated for the purpose of the proposed demerger of the company’s ice cream business, which is currently under evaluation by the Board of the company,” the FMCG major said in a regulatory filing on January 10.
HUL will own 100 percent of the issued and subscribed share capital of KWIL. The newly-formed entity has authorised capital of Rs 250 crore, as per the disclosure.
Earlier on November 25, 2024, HUL approved the demerger of the ice cream business, which owns brands like Kwality Wall’s, Cornetto and Magnum into an independent listed entity.
The existing shareholders of the FMCG major will receive shares in the new entity in proportion to their shareholding in HUL, it had said.
The board of HUL decided to de-merge the ice cream business, based on the recommendation of the Independent Committee, which was formed by the FMCG major earlier in September 2024.
The company highlighted the ice cream category as a high-growth market that contributes around 3 percent to HUL’s total revenue. To fully unlock the potential of this market, significant investments are needed.
It said the ice cream business operates under a unique model that includes specialised cold chain infrastructure and a distinct channel landscape, which limits potential synergies with the rest of HUL’s operations.
The company’s restructuring aims to prioritise HUL’s core business areas and expand its footprint in growing sectors like beauty, foods, health and wellbeing. By divesting the ice cream business, HUL will provide greater flexibility and focus for that segment, ultimately optimising value for shareholders.
Earlier this year, HUL’s parent entity, Unilever PLC, had expressed its intention to separate its global ice cream business across jurisdictions. For the financial year ended March 2024, HUL’s revenue from the sale of products was Rs 59,579 crore.
