HUL to Spin-Off Kwality Walls: Shareholding Ratio Revealed
Hindustan Unilever Limited (HUL), one of India’s largest and oldest FMCG companies, has announced a major restructuring of its business. The company’s board has approved the demerger of its ice cream division, Kwality Walls, into a separate entity. The decision was finalized on Wednesday, January 22, 2025. The new entity will be listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Shareholding Ratio for the New Entity
As per the demerger terms, HUL shareholders will receive shares in the newly created entity in proportion to their existing shareholding. Speaking to CNBCTV18, the company stated that the new entity, Kwality Walls India Limited (KWIL), will become a leading listed ice cream company in the country. It will be managed with focused strategies tailored to its unique business model and market dynamics, enabling it to achieve its full potential.
Upon the demerger and listing of KWIL, all its shares will be directly held by HUL shareholders. HUL emphasized that KWIL, being the largest ice cream business globally, will maintain its market leadership with an extensive portfolio of brands and innovations. Currently, the company owns popular ice cream brands such as Kwality Walls, Cornetto, and Magnum.
Acquisition of Minimalist by HUL
In addition to the demerger, HUL’s board has approved the acquisition of a 95% stake in the cosmetic brand Minimalist for ₹2,955 crore at an enterprise valuation. Minimalist specializes in skincare, hair fall solutions, and anti-aging products. This strategic move is aimed at strengthening HUL’s presence in the growing personal care market.
Financial Performance of HUL Ice Cream Business
For the fiscal year ending March 31, 2024, HUL’s ice cream business reported a turnover of ₹1,595 crore, contributing 2.7% to the company’s overall revenue. The company has also disclosed its quarterly results, posting a net profit of ₹3,001 crore for Q3 (October to December 2024), a significant rise from ₹2,519 crore in the same period last year.
Overall Revenue and Profit Insights
HUL’s revenue saw a marginal year-on-year growth of 1%, reaching ₹15,408 crore, slightly below the estimated ₹15,600 crore. Its EBITDA grew by 1% to ₹3,570 crore, marginally falling short of the expected ₹3,600 crore. The EBITDA margin stood at 23.15%. HUL’s shares closed at ₹2,340 on Wednesday.
Strategic Implications for KWIL
The demerger of Kwality Walls is a strategic move aimed at enhancing operational efficiency and providing flexibility for focused growth. KWIL’s integration with regulatory platforms like GSTN and MCA will streamline its operations further, ensuring better compliance and quicker scalability.
Backlinking for Additional Insights
- Learn more about HUL’s corporate history and its global operations.
- Dive into the journey of Kwality Walls as a leading ice cream brand in India.
- Explore how acquisitions like Minimalist align with HUL’s growth strategies in the personal care sector.
This restructuring not only reflects HUL’s commitment to market leadership but also its adaptability in aligning with emerging business opportunities, making it a significant step in India’s corporate landscape.