In a strategic move aimed at unlocking the full potential of its ice cream business, Hindustan Unilever Limited (HUL), one of India’s leading FMCG companies, has announced the incorporation of a new subsidiary, Kwality Wall’s (India) Ltd (KWIL). The move signals HUL’s intent to demerge its ice cream division into an independent entity.
Kwality Wall’s (India) Ltd: A New Chapter
On January 10, 2025, HUL disclosed in a regulatory filing that KWIL has been established as a wholly-owned subsidiary to facilitate the demerger process. With an authorized capital of Rs 250 crore, KWIL will oversee the ice cream brands currently under HUL, including household names such as Kwality Wall’s, Cornetto, and Magnum.
The demerger, which was initially approved by HUL’s board on November 25, 2024, aims to transform the ice cream segment into a standalone listed entity. Existing HUL shareholders will receive proportional shares in KWIL, ensuring continuity of ownership.
Rationale Behind the Demerger
HUL’s decision to spin off its ice cream business stems from recommendations made by an Independent Committee formed in September 2024. The committee’s analysis highlighted the distinct characteristics of the ice cream business, which operates under a specialised model requiring significant investments in cold chain infrastructure and unique distribution channels. These factors limit operational synergies with HUL’s broader FMCG portfolio.
Additionally, the ice cream category is a high-growth market, contributing approximately 3% to HUL’s total revenue. For the financial year ending March 2024, HUL reported a revenue of Rs 59,579 crore from product sales. The restructuring is expected to help the company prioritise its core sectors—beauty, foods, health, and wellbeing—while allowing the ice cream business to grow independently.
Unlocking Market Potential
The demerger is seen as a strategic move to unlock the untapped potential of the ice cream segment. As part of the restructuring, KWIL will benefit from greater operational flexibility, enhanced focus, and the ability to attract targeted investments. This will position it to better compete in the dynamic and competitive ice cream market.
HUL’s parent company, Unilever PLC, had earlier announced its intention to separate its global ice cream operations across different jurisdictions. The move aligns with Unilever’s global strategy and underscores the potential value of the ice cream business.
Future Prospects
The creation of KWIL is expected to drive long-term shareholder value by providing focused growth opportunities in the ice cream segment. For HUL, the demerger will free up resources to strengthen its footprint in high-growth categories such as beauty and personal care, packaged foods, and health and wellness.
HUL’s strategic pivot reflects its ability to adapt to evolving market conditions while leveraging its expertise to deliver sustainable growth. As KWIL prepares to carve out its path in the ice cream industry, it will undoubtedly emerge as a key player in India’s FMCG landscape.
Conclusion
The incorporation of Kwality Wall’s (India) Ltd marks a significant milestone in HUL’s journey. By creating a dedicated entity for its ice cream business, HUL has demonstrated its commitment to innovation, growth, and value creation. As the demerger process unfolds, all eyes will be on KWIL to see how it leverages its newfound independence to capture the hearts and palates of ice cream lovers across India.
