Description

NCLT approved demerger of Hindustan Unilever's Ice Cream Business to Kwality Wall's (India) Limited with record date December 5, 2025. Shareholders to receive 1:1 equity shares in the resulting company.

Summary

Hindustan Unilever Ltd (Scrip Code 500696) has received approval from the Hon’ble National Company Law Tribunal (NCLT), Mumbai Bench for a Scheme of Arrangement involving the demerger of its Ice Cream Business Undertaking to Kwality Wall’s (India) Limited. The record date has been set as December 5, 2025, for determining shareholder entitlement. Shareholders of HUL will receive 1 equity share of Kwality Wall’s (India) Limited for every 1 equity share held in HUL. The stock will trade under Special Pre-open Session (SPOS) on the ex-entitlement date.

Key Points

  • NCLT Mumbai Bench has approved the Scheme of Arrangement for demerger
  • Demerged Company: Hindustan Unilever Ltd (Scrip Code 500696)
  • Resulting Company: Kwality Wall’s (India) Limited
  • Business Being Demerged: Ice Cream Business Undertaking of HUL
  • Share Exchange Ratio: 1:1 (1 equity share of Kwality Wall’s for every 1 equity share of HUL)
  • Face Value: Re. 1/- per share for both companies
  • Equity shares will be issued to all HUL shareholders as on record date
  • Kwality Wall’s (India) Limited shares will be listed on BSE Limited subject to compliance with requisite formalities

Regulatory Changes

No new regulatory framework changes. This circular implements existing corporate restructuring provisions under the Companies Act as approved by NCLT.

Compliance Requirements

  • Trading members must note the record date and ex-entitlement date for processing corporate action
  • HUL will be part of Call Auction in Pre-open Session (Special Pre-open Session - SPOS) on December 5, 2025, as per SEBI Circular No. CIR/MRD/DP/01/2012 dated January 20, 2012
  • Trading members should refer to BSE notice no. 20120216-29 dated February 16, 2012 for SPOS procedures
  • The Resulting Company must complete requisite formalities for listing of equity shares on BSE

Important Dates

  • Record Date: December 5, 2025 - For determining entitlement of shareholders for the demerger
  • Ex-Entitlement Date: December 5, 2025 (Settlement No. DR-771/2025-2026)
  • Special Pre-open Session (SPOS): December 5, 2025 - HUL will trade under call auction
  • Notice Date: November 27, 2025

Impact Assessment

Market Impact: High - This demerger affects one of India’s largest FMCG companies. All HUL shareholders will receive shares in the newly listed entity Kwality Wall’s (India) Limited, potentially creating significant trading activity in both stocks.

Shareholder Impact: High - Every HUL shareholder will automatically receive equal number of shares in Kwality Wall’s (India) Limited, doubling their portfolio holdings across two separate entities.

Trading Impact: The mandatory SPOS on December 5, 2025 will result in price discovery through call auction mechanism rather than normal continuous trading, which may lead to volatility.

Operational Impact: Medium - Trading members and depositories need to process the corporate action, credit new shares, and facilitate listing of the resulting company.

Strategic Impact: This represents HUL’s strategic decision to separate its ice cream business into a focused entity, potentially unlocking shareholder value and allowing independent growth strategies for both businesses.

Impact Justification

Major corporate restructuring of a large-cap company involving demerger of significant business vertical affecting all HUL shareholders with mandatory SPOS trading session