FMCG major Hindustan Unilever (HUL) has roped in a new subsidiary, Kwality Wall's, for the proposed spin-off of the company's ice cream business.
“Kwality Wall's (India) Ltd (KWIL) has been incorporated for the proposed demerger of the company's ice cream business, which is currently under review by the company's board,” the FMCG major said in a regulatory filing in January. 10.
HUL will own 100 percent of the issued and subscribed share capital of KWIL. The newly formed entity has an authorized capital of Rs 250 crore, according to the disclosure.
On 25 November 2024, HUL approved the demerger of the ice cream business, which owns brands such as Kwality Wall's, Cornetto and Magnum, into an independent listed entity.
Existing shareholders of the FMCG major will receive shares in the new entity in proportion to their stake in HUL, the company said.
HUL's board decided to spin off the ice cream business on the recommendation of an independent committee formed by the FMCG major earlier in September 2024.
The company highlighted the ice cream category as a fast-growing market that contributes around 3 percent to HUL's total revenue. Significant investment is required to fully unlock the potential of this market.
He said the ice cream business operates on a unique model that includes specialized cold chain infrastructure and a distinct channel landscape, limiting potential synergies with the rest of HUL's operations.
The company's restructuring aims to prioritize HUL's core business areas and expand its presence in growth sectors such as beauty, food, health and wellness. By divesting the ice cream business, HUL will provide greater flexibility and focus to this segment, ultimately optimizing shareholder value.
Earlier this year, HUL's parent Unilever PLC expressed its intention to spin off its global ice cream business across jurisdictions. For the financial year ending March 2024, HUL's revenue from product sales was Rs 59,579 crore.
