HUL receives NCLT approval to demerge ice cream business into Kwality Wall’s India

New Delhi: Hindustan Unilever (HUL) has received approval from the Mumbai bench of the National Company Law Tribunal (NCLT) to separate its ice cream business into Kwality Wall’s India (KWIL). 

The tribunal’s order, issued under Sections 230 to 232 of the Companies Act, 2013, clears the path for the formal demerger of HUL’s ice cream operations from its core fast-moving consumer goods (FMCG) portfolio.

The move is part of parent company Unilever’s global plan to spin off its €15-billion ice cream division into an independent entity. India, Unilever’s second-largest market after the United States, contributes over 12% to its global sales.

Under the approved Scheme of Arrangement, HUL will transfer its entire ice cream portfolio, including brands such as Kwality Wall’s, Cornetto, Magnum, Feast, and Creamy Delight, to the new subsidiary. The division generates around Rs 1,800 crore in annual revenue, accounting for roughly 3% of HUL’s total turnover.

As part of the demerger, HUL shareholders will receive one share of KWIL for every share held in HUL. Magnum HoldCo, a subsidiary of Unilever’s global ice cream business, will hold around 61.9 per cent stake in KWIL, while HUL shareholders will collectively own the remaining shares. In accordance with SEBI regulations, Magnum HoldCo will also make an open offer to public shareholders, the company stated.

The new entity will assume all assets and liabilities of HUL’s ice cream operations, including five manufacturing facilities, a workforce of about 1,200 employees, and positive working capital. KWIL will begin as a debt-free company, with access to dedicated funds for capacity expansion, including freezer installations and cold-chain infrastructure development.

HUL’s management has previously said the demerger would allow the business to operate with increased flexibility and investment focus. “The separation offers strategic flexibility and sharper focus on a high-growth category,” Ritesh Tiwari, HUL’s Chief Financial Officer, had indicated in earlier earnings calls, adding that the company expects the ice cream segment to continue growing in double digits, driven by rising disposable incomes and low per capita consumption in India.

The demerger received board approval in November 2024, followed by clearance under a scheme of arrangement in January 2025, and subsequent shareholder consent. With the NCLT approval now secured, the process is expected to be completed by the end of FY26.