Hindustan Unilever (HUL) on Thursday said that it had received approval from the Mumbai bench of the National Company Law Tribunal (NCLT) to demerge its ice cream business into Kwality Wall’s India (KWIL). The development paves way for the formal separation of HUL’s ice cream operations from its core fast-moving consumer goods (FMCG) portfolio.
The tribunal’s nod, which was granted under Sections 230 to 232 of the Companies Act, 2013, also comes as part of parent Unilever’s global plan to spin off its €15-billion ice cream business into an independent entity. India is Unilever’s second-largest market after the US, contributing over 12% to global sales.
Under the approved Scheme of Arrangement, HUL will transfer its entire ice cream business—including brands such as Kwality Wall’s, Cornetto, Magnum, Feast, and Creamy Delight—to the new subsidiary. The division contributes around Rs 1,800 crore in annual revenue, accounting for about 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, an arm of Unilever’s global ice cream business, will acquire roughly 61.9% stake in KWIL, while HUL shareholders will collectively hold the remaining shares. In line with SEBI norms, Magnum HoldCo will also make an open offer to public shareholders, HUL said.
The newly formed company will take over all assets and liabilities of HUL’s ice cream business, including five manufacturing facilities, a workforce of around 1,200 employees, and positive working capital. KWIL will start off debt-free, but will have access to dedicated funding for future expansion, including capacity building and freezer installations to strengthen its cold-chain footprint.
HUL’s management had said the demerger would allow the business to operate with greater agility and focused investment. “The separation offers strategic flexibility and sharper focus on a high-growth category,” Ritesh Tiwari, HUL’s CFO had indicated in recent 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 had earlier received board approval in November 2024, followed by clearance under a scheme of arrangement in January 2025, and subsequent shareholder approval. With the NCLT nod in place, the process is on track for completion by FY26-end.
By carving out its ice cream arm, HUL aims to ensure sharper operational focus, optimized capital allocation, and enhanced shareholder value, analysts at Motilal Oswal said. The ice cream business, which operates in a capital-intensive and fast-evolving consumer category, is expected to benefit from a more independent governance and investment structure.