Breaking: HUL gets NCLT nod to spin off ice cream business into Kwality Wall’s Ltd

The National Company Law Tribunal (NCLT), Mumbai Bench, has approved Hindustan Unilever Ltd’s (HUL) long-awaited proposal to demerge its ice cream business into Kwality Wall’s (India) Ltd (KWIL), marking a key milestone in the FMCG major’s ongoing restructuring and value-unlocking strategy.

The tribunal’s nod, granted under Sections 230 to 232 of the Companies Act, 2013, clears the way for the formal separation of HUL’s ice cream operations from its core fast-moving consumer goods (FMCG) portfolio. The move comes as part of parent company Unilever Plc’s global plan to spin off its €15-billion ice cream business into an independent entity.

Under the approved Scheme of Arrangement, HUL will transfer its entire ice cream business—including brands such as Kwality Wall’s, Cornetto, Magnum, Feast, and Creamy Delight—to the new subsidiary. The division contributes around ₹1,800 crore in annual revenue, accounting for about 3% of HUL’s total turnover.

Share Swap and Structure

As part of the demerger, HUL shareholders will receive one share of KWIL for every share held in HUL. Magnum HoldCo, an arm of Unilever’s global ice cream business, will acquire roughly 61.9% stake in KWIL, while HUL shareholders will collectively hold the remaining shares. In line with SEBI norms, Magnum HoldCo will also make an open offer to public shareholders.

The newly formed company will take over all assets and liabilities of HUL’s ice cream business, including five manufacturing facilities, a workforce of around 1,200 employees, and positive working capital. KWIL will start off debt-free, but will have access to dedicated funding for future expansion, including capacity building and freezer installations to strengthen its cold-chain footprint.

Strategic Focus and Growth Outlook

HUL’s Chief Financial Officer Ritesh Tiwari had said the demerger would allow the business to operate with greater agility and focused investment. “The separation offers strategic flexibility and sharper focus on a high-growth category,” Tiwari said, adding that the company expects the ice cream segment to continue growing at double-digit rates driven by rising disposable incomes and low per capita consumption in India.

The demerger had earlier received board approval in November 2024, followed by clearance under a scheme of arrangement in January 2025, and subsequent shareholder approval. With the NCLT nod now in place, the process is on track for completion by FY26, HUL said in its filing.

Global Alignment with Unilever’s Strategy

The move aligns with Unilever Plc’s broader global restructuring plan to spin off its ice cream division into a standalone entity — The Magnum Ice Cream Company — expected to be listed in Amsterdam, London, and New York by late 2025. Unilever is likely to retain less than 20% stake in the new global business post-listing.

By carving out its ice cream arm, HUL aims to ensure sharper operational focus, optimized capital allocation, and enhanced shareholder value. The ice cream business, which operates in a capital-intensive and fast-evolving consumer category, is expected to benefit from a more independent governance and investment structure.

Industry analysts view the move as part of a global trend among consumer goods majors to streamline operations and focus on core growth segments. The NCLT’s approval now sets the stage for HUL to complete one of its most significant structural reorganizations in recent years.