MUMBAI, Dec 15: The demerger of Hindustan Unilever Limited’s (HUL) ice cream business has formally come into effect, marking a significant corporate restructuring for one of India’s largest FMCG companies.
The National Company Law Tribunal (NCLT), Mumbai Bench, approved the Scheme of Arrangement between HUL and Kwality Wall’s (India) Limited (KWIL), facilitating the transfer of HUL’s ice cream business into a separate listed entity. The scheme, sanctioned via orders dated October 30 and November 6, 2025, became effective from December 1, 2025, which also serves as the appointed date.
Under the arrangement, HUL’s ice cream business has been demerged and vested in KWIL on a going concern basis, allowing the standalone ice cream entity to operate independently.
Shareholder allotment and tax clarity
As part of the demerger, KWIL allotted 234.95 crore equity shares of Re 1 each to eligible HUL shareholders in a 1:1 ratio, meaning shareholders received one KWIL share for every HUL share held as on the record date of December 5, 2025.
For taxation purposes, the cost of acquisition of HUL shares has been apportioned between HUL and KWIL. Of the original investment value, 98.09% will continue to be attributed to HUL shares, while 1.91% will be allocated to the newly received KWIL shares. For example, a shareholder who invested Rs 4 lakh in 1,000 HUL shares will now hold 1,000 HUL shares with a cost of Rs 3,92,360 and 1,000 KWIL shares with a cost of Rs 7,640.
The company clarified that the allotment of KWIL shares will not be treated as a transfer for tax purposes, and the acquisition date of KWIL shares will be deemed the same as the original acquisition date of the corresponding HUL shares. Shareholders have been advised to consult their tax advisors for individual guidance.
Strategic impact
With the demerger now in effect, HUL and KWIL can pursue distinct growth strategies, providing shareholders with direct ownership in both businesses and greater clarity for long-term planning.