HUL To Expand Ice Cream Business with New Subsidiary Kwality Wall’s

Hindustan Unilever (HUL), a leading FMCG company, has established a new subsidiary, Kwality Wall’s (KWIL), as part of its plan to demerge its ice cream business. HUL will retain full ownership of the subsidiary, holding 100% of its issued and subscribed share capital. The new entity has an authorised capital of Rs 250 crore, as disclosed.

This move follows HUL’s earlier announcement on November 25, 2024, to spin off its ice cream business, which includes popular brands like Kwality Wall’s, Cornetto, and Magnum, into a standalone listed entity. Existing HUL shareholders will receive shares in the new entity based on their current stake in HUL.

The decision to de-merge was made by HUL’s board, acting on the recommendation of an Independent Committee set up in September 2024. The company identified the ice cream sector as a high-growth market, contributing around 3% to HUL’s total revenue, and recognized that significant investment is needed to unlock its full potential.

HUL further emphasized that the ice cream business operates with specialized cold chain infrastructure and a distinct distribution model, which limits synergies with its core operations. By demerging, HUL aims to sharpen its focus on its primary business areas, such as beauty, foods, and health, while offering more flexibility to the ice cream segment, thereby enhancing shareholder value.

In line with its parent company Unilever PLC’s global strategy to separate its ice cream operations, HUL’s restructuring is set to optimize the company’s footprint in rapidly growing sectors. For the financial year ending March 2024, HUL reported a revenue of Rs 59,579 crore from the sale of products.