D-Street didn't like the 'demerged flavour'? All about Hindustan Unilever's ice cream arm Kwality Wall's shares listing

Shares of Kwality Wall's (India) Ltd (KWIL) staged a muted debut on the bourses on Monday, with the stock trading below its discovery price. The ice cream maker got listed at Rs 29.80 apiece on NSE. During the day, it touched the 5 per cent upper circuit level of Rs 31.39, but later pared gains and was last seen trading 0.10 per cent lower at Rs 29.87. At that level, the stock reflected a 25.70 per cent discount to the indicative price of Rs 40.20 per share.

Kwality Wall's demerger

The listing follows the demerger of the ice cream business from FMCG major Hindustan Unilever Ltd (HUL). HUL's stock price had adjusted to the demerger in December last year.

In November 2024, HUL approved the demerger of its ice cream business, which houses brands such as 'Kwality Wall's', 'Cornetto' and 'Magnum'. The National Company Law Tribunal (NCLT) approved the scheme on October 30.

Ice cream division's contribution

The ice cream division accounts for around 3 per cent of HUL's annual turnover, contributing approximately Rs 1,800 crore to its total revenue.

Under the approved scheme, the share entitlement ratio was fixed at 1:1, meaning every HUL shareholder received one share of Kwality Wall's for each HUL share held as on the record date.

The record date to determine eligible shareholders was December 5, while the allotment date was set as December 29. Shareholders whose names appeared in the register of members as on the record date became entitled to receive shares of the demerged entity.

Expert view

Commenting on the listing, market veteran Arun Kejriwal said there are two ways to look at the development. "At Hindustan Unilever, the first is to view it as a company where all its units were doing well, except the ice cream business. So, they decided to carve it out, demerge it and make it a separate entity. Second, the markets were never quite comfortable with this business. So yes, the listing has happened, but this is not a stock that is going to make you money in the near term whatsoever," Kejriwal told Business Today.

Nuvama Institutional Equities highlighted margin pressures at KWIL even as it underscored the company's structural strengths and long-term opportunity following HUL's ice cream business demerger. "In FY25, KWIL reported an EBITDA margin of 7.1 per cent, which compressed to breakeven in H1FY26 -- below Vadilal's 18.5 per cent and Havmor's 17–18 per cent. Given the category's high seasonality (similar to carbonated drinks, beer, talc) and a likely need to invest in more local manufacturing and touchpoints, clarity is needed on capex and cash levels," Nuvama said.

The brokerage added that KWIL has one of India's largest cold chain networks with 200k+ cabinets but remains underpenetrated versus 4–5 million CSD outlets, implying strong expansion potential. It expects Magnum, Cornetto and Walls, backed by the parent's innovation pipeline, to drive mix improvement. The premium portfolio is projected to rise from 12–15 per cent in FY25 to 18–22 per cent by FY31E, supported by a refreshed Rs 10–50 price architecture targeting India's $26 billion snacking opportunity.

Share purchase agreement

Separately, the company informed the exchanges that a share purchase agreement (SPA) was executed in June 2025 between the Unilever Shareholders and The Magnum Ice Cream Company HoldCo 1 Netherlands BV (TMICC).

Under the agreement, TMICC will acquire the entire stake held by the Unilever Shareholders in Kwality Wall's, thereby taking a controlling interest in KWIL.