HSIL Ltd – the owner of ‘Hindware’ sanitaryware brand demerged its Building product & consumer product division from its glass packing (bottles) business.
The ‘Building products division’ (BPD) included the Hindware sanitaryware brand/products plus its PVC & CPVC pipes brand ‘Truflo’ – started in 2017.
The consumer products division (CPD) included Kitchenware (Chimneys, hobs, Geysers and air coolers). Also started in 2017 as parts of its ‘diversification’ strategy.
BPD and CPD were transferred into what became HHIL – Hindware Home Innovations Ltd, as we know it today.
And the Glass packaging business remained within the original listed entity (HSIL ltd) which was renamed AGI Greenpac in 2022.
Over the next 4 years – While both HHIL & AGI Greenpac beat the NIFTY 500 by a healthy margin, it was AGI Greenpac that exceeded return expectations.
Post demerger performance – HHIL & AGI Greenpac
Since late 2023, however, both entities have underperformed NIFTY 500. During this period NIFTY 500 is up ~34%, while AGI Greenpac and HHIL are down -41% & -52% respectively.
So, HHIL management decided to do what it did in 2019.
It signed off on another demerger. This time separating BPD from CPD into separate listed entities.
Can the same trick work twice? Let’s dive in.
Why HHIL needs another demerger?
Just like in 2018, HHIL didn’t end up here by accident.
As part of the previous restructuring, It was always two companies operating under one roof.
On one side, the Building Products Division (BPD) – Hindware sanitaryware & faucets (legacy core business) and the Truflo – PVC/CPVC pipes brand.
Manufacturing-led, dealer-driven, real estate sensitive but at various stages in their corporate lives. One of a more mature and profitable business, while the other is just 8-9 years old but barely profitable.
Combined, the BPD earned ₹1,611 crore of revenue in 9MFY25 with blended EBITDA (Earnings before interest, tax, depreciation and amortisation) margins of 9.8%.
On the other, the Consumer Products Division (CPD) – Hindware Atlantic water heaters, kitchen chimneys, hobs and the Evok online furniture retailer.
Asset-light, retail-driven, household-focused. ₹237 crore in 9MFY26 revenue, with 7.2% EBITDA margin during the period but reported a ₹40 crore loss in FY25 & a ₹18 crore loss in FY24.
Even this 7.2% EBITDA margin in 9MFY26 is a result of restructuring activities such as discontinuing loss making operations that were undertaken starting Q1FY26 onwards.
The bottom-line is that the two businesses had almost nothing in common. Different customers such as plumbers and builders versus households. Different distribution & go to market strategies i.e. specialty plumbing dealers versus electronics chains and Amazon. Different capital needs i.e. factories and inventory versus sourcing relationships.
For years, BPD subsidised CPD. From an investor’s lens, you got a profitable bathware story dragging a money-losing consumer business behind it.
The restructuring begins
The promoters started making moves in 2024. They infused about ₹150 crore as part of a ₹250 crore rights issue, signalling commitment to fix the business.
As a result, group’s Net Debt/EBITDA improved from 2.0x to 1.2x. The cleanup followed.
Since March 2025, when the board approved the demerger of BPD & CPD divisions, it simultaneously began exiting loss making operations.
In Q1 FY26, management took a one-time ₹49 crore hit to discontinue several loss-making consumer product lines. Since then, the consumer business has gone from a ₹10 crore EBITDA loss in 9M FY25 to ₹17 crore EBITDA profit in 9M FY26. It even broke a profit on PBT level – from -₹37 crore to +₹5 crore respectively.
The Hintastica JV – HHIL’s 50:50 water heater partnership with French firm Atlantic SFDT – was the next domino. In December 2025 the JV’s underperforming Telangana factory was sold to Italian appliance giant Ariston for ₹115 crore, repaying all JV debt.
In the Q3FY26 concall, Sandeep Sikka – Group CFO clarified, “This factory sale was part of our joint venture with Groupe Atlantic. We had set up a water heater factory there…The proceeds were used to repay HPL’s entire debt in December. Going forward, this will operate as a trading model.”
Then, In March 2026, HHIL exercised its put option on its 50% stake i.e. – the right to sell at a minimum pre-agreed on terms with the JV partner – Groupe Atlantic. The JV now operates as a clean trading vehicle, and HHIL is positioned to receive cash for its stake. While HHIL’s investment in the JV stands at INR 78 cr, the final receivables amount is yet to be confirmed.
What is the new scheme?
The plan is a Composite Scheme of Arrangement, which was approved by the board on 27th March 2025. Two corporate actions bundled into one corporate move.
Here are the two steps:
What’s actually happening here.
As we discussed, HHIL today is one listed company doing two very different things.
On one side, the CPD – Consumer Products business. On the other side, the BPD – Bathware + Pipes business. Two businesses, one ticker, one stock price.
The scheme splits them into two separate listed companies, each with its own ticker and its own stock price.
The Consumer Products business goes into a new listed company called HHIL Limited (spun off from the mothership HHIL. Please note they’re different entities).
The Bathware + Pipes business goes into a separate listed company called Hindware Limited (which is currently a subsidiary of HHIL).
For every 1 share of HHIL shareholders own today, they receive 1 share of HHIL Limited and 1 share of Hindware Limited.
Simply put, 1 share in HHIL becomes 1 share in HHIL ltd (CPD) and 1 share in Hindware Ltd (BPD). And HHIL, which is the current listed entity, ceases to exist.
Where the assets and liabilities go.
Hindware Limited gets an estimated 84% of group assets, all the manufacturing plants, about ₹715 crore of bank debt, and around ₹593 crore of net worth.
HHIL Limited gets the asset-light consumer business with only about ₹25 crore of bank debt (essentially debt-free) and about ₹104 crore of net worth – plus expected cash from the Hintastica put-back.
Disclaimer: Please note these are If, then estimates and maybe subject to error.
The timeline – Where things stand today.
The board approved the scheme in March 2025. Shareholders and creditors approved it in NCLT-convened meetings in March 2026. Final NCLT sanction is the next milestone – typically 4–12 weeks after shareholder meetings.
If this scheme tracks the 2018 HSIL playbook (~16 months from appointed date to listing), the new shares should start trading sometime in the second half of 2026.
What’s in it for shareholders?
Let’s try Putting some numbers on it: a back-of-the-envelope SOTP – Sum of the parts valuation.
Rough estimates might help frame the size of the prize.
The assumptions include FY27E EBITDA based on management’s stated trajectory, EV/EBITDA multiples in line with Indian building materials and consumer durable comparables, and the Hintastica cash inflow added to HHIL Limited.
Disclaimer: Please note these are If, then valuation estimates and maybe subject to error.
Some Caveats to bear in mind.
Multiples are ranges – they’ll move with market sentiment and the pipes cycle. EBITDA projections are illustrative based on management commentary and the annualised 9M FY26 trajectory. Hintastica put proceeds depend on the JV valuation mechanism. This means SOTPs always look cleaner on paper than in the market.
Even with all that, the spread tells you something. The bear case isn’t far from where HHIL trades today. The base case implies meaningful upside if both entities re-rate to sector multiples. The bull case is what the 2018 split delivered for the unexpected entity – a multi-bagger outcome.
The interesting question is which of the two entities ends up being the AGI Greenpac this round?
The default answer is probably Hindware Limited – bigger franchise, established margins, the obvious institutional pick. But the AGI lesson from 2018 is that the entity investors are less excited about may outperform.
HHIL Limited will list small. Asset-light. Debt-free. Cash-rich. Just-turned-profitable. Few sell-side analysts will cover it on day one. That’s exactly the kind of setup where mispricing tends to live.
History doesn’t repeat. But it does rhyme. And the rhyme here may be worth paying attention to.
Note: We have relied on data from http://www.Screener.in and http://www.tijorifinance.com throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
Disclaimer:
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Rahul Rao has been Investing since 2014. He has helped conduct financial literacy programs for over 1,50,000 investors. He helped start a family office for a 50-year-old conglomerate and worked at an AIF, focusing on small and mid-cap opportunities. He evaluates stocks using an evidence-based, first-principles approach as opposed to comforting narratives.
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