HUL has finalized its decision to spin off its Ice Cream business and make Quality Walls an independent company. The demerger will be effective from December 1, 2025, while investors will receive KWIL shares in a 1:1 ratio on the record date of December 5.
HUL Share: Hindustan Unilever Limited has stirred the market with its major decision to separate its Ice Cream business from the parent company. Quality Walls will be established as an independent company and subsequently listed on the stock exchange. The company's board has approved this entire process, clarifying the demerger timeline and terms.
HUL believes that transforming the Ice Cream business into a separate entity will provide it with a better opportunity for independent growth, allowing HUL to focus more on its Core Business, which will positively impact long-term development.
When will the demerger be effective?
The company has officially clarified that both the Effective Date and Appointed Date for the demerger will be December 1, 2025. This means that once all regulatory approvals and formal procedures are completed, the demerger will be considered effective from this date. This decision is significant because the market had been speculating on it for several months, and now, with a clear timeline established, investors have gained clarity. From December 1, 2025, Quality Walls (India) Limited, or KWIL, will officially separate from HUL and begin operating with its independent corporate structure.
How will investors receive KWIL shares?
HUL has announced December 5, 2025, as the Record Date for the distribution of shares of the new company, KWIL. Investors holding HUL shares registered by this date will receive shares of the new company in a 1:1 ratio. This means if an investor holds ten HUL shares, they will receive ten KWIL shares. The Face Value of shares for both companies has been set at Re 1 to ensure the process remains transparent and simple for new investors. With the record date set, it is clear that KWIL's formation and listing are now confirmed, and investors will automatically receive a stake in it, as HUL is not undertaking any separate Fresh Issue.
Company Appoints New Independent Director
HUL has strengthened its board by appointing Bobby Parikh as an Independent Director. His tenure will begin on December 1, 2025, and last for five years. The company has also appointed him as the Chairman of the Risk Management Committee and a member of the Audit Committee. Bobby Parikh has previously served as a Director in major companies such as Infosys, Biocon, and Indostar Capital. Additionally, he has worked as the CEO of EY India and possesses a deep understanding of Indian Corporate Governance, Compliance, and Finance Structures. HUL will benefit from his experience in strategic decision-making, financial discipline, and navigating changing market conditions.
Top Management's Reaction
Nitin Paranjpe, Non-Executive Chairman of HUL, stated that Bobby Parikh's experience would prove invaluable to the company as he possesses the ability to provide appropriate suggestions and make sound decisions even in complex situations. He added that during HUL's upcoming transition period, when a large business unit is separating from the company, the role of experienced leadership becomes even more crucial. Bobby Parikh, expressing his honor at the appointment, said he is excited to work with a prestigious company like HUL on long-term growth strategies.
HUL Share Movement in the Stock Market
News of the demerger had a positive impact on the stock market, with HUL shares trading at ₹2452 today, an increase of ₹11.25 from the previous trading session. For investors, this signals that the market views this decision positively, as there is a b possibility of margin improvement once the Ice Cream Unit is separated from the Core Business. This is expected to lead to better improvements in HUL's Profitability and Operational Efficiency.
Nuvama Brokerage House Report and Target Price
Nuvama Institutional Equities has maintained a 'BUY' recommendation on HUL, stating that HUL's share price could reach ₹3200 in the next 12 months. The report notes that HUL is currently trading at a valuation of approximately 9x EV/Sales, which is considered stable and b in the FMCG sector. The ice cream business currently contributes only 3 percent to HUL's total sales, but it is a low-margin business due to its high dependence on seasonality and distribution.
According to the report, HUL's EBITDA Margin could improve by approximately 50–60 Basis Points after KWIL's separation. KWIL's estimated Market Value is approximately ₹12–15 billion. This clearly indicates that the quality of HUL's Core FMCG Business will be further strengthened, and the potential for long-term benefits for investors will increase.
