HUL-Kwality Walls demerger: All details on key dates, allotment ratio, listing & targets

Hindustan Unilever demerger: Shares of FMCG major Hindustan Unilever (HUL) are set to demerge ice-cream business, Kwality Walls (India), after a special pre-open session on Friday, December 5. Shares of HUL, who own the sale of HUL as on the record date, December 5, shall be eligible to get shares of demerged ice-cream entity.  

Demerger ratio

The share entitlement ratio for the demerger has been set at 1:1, which means that every shareholder of HUL will receive one share of the Kwality Walls (India) for every one share of Hindustan Unilever held by the shareholders as of the record date.

Demerger story

The company board of HUL had approved to spin-off or demerge its ice-cream business in November 2024. Kwality Walls (India) owns popular brands like 'Cornetto' and 'Magnum' in India. National Company Law Tribunal (NCLT) approved HUL's demerger scheme on October 30. Kwality Walls has a total annual revenue of Rs 1,800 crore, while is nearly 3 per cent of HUL's total revenue.

Beside the record date, HUL has fixed December 29 as the allotment date. It means that HUL shareholders whose names appear in the register of members as on the record date will be entitled to receive the shares of Kwality Walls (India) as part of the demerger scheme. The record date is set to determine the eligibility of the shareholders.  

Kwality Walls shares listing

Hindustan Unilever has not confirmed the date of listing of Kwality Walls (India). The FMCG major said that the process of allotment, credit of shares and listing of demerger unit will be undertake in the due course of time. However, SEBI rules specify that the demerger entity shall be listed within 60 days from the NCLT's approval.  

Kwality Walls to be come a NIfty50 stock?

On November 28, the National Stock Exchange of India (NSE) said that Kwality Walls (India) will be included in the Nifty50 index from December 5. The exchange will host a special pre-opening session for HUL on December, ahead of the record date of the proposed demerger. This session will be hosted to determine the fair value of HUL, net of ice-cream business.

As part of the index adjustments, the demerged entity will be briefly added to as many as 35 Nifty indices at a zero price, using a dummy symbol 'DUMMYHDLVR' and its fair value will be determined once the company announces the listing date for Kwality Walls (India). It will gradually move out of select indices.  

Target prices of HUL and Kwality Walls (India)

Nuvama Institutional Equities, citing Kwality Walls (India) as pure-play ice-cream entity and a part of multinational parent, benefitting from GST cuts and shift towards organised players. "We expect Kwality Walls to list in February and at a likely 5 times EV/sales in our view (around Rs 50–55), a discount to HUL’s 9 times EV/sales," it added.

Hindustan Unilever confirmed the ice cream division’s demerger process is on schedule, with listing expected in Q4FY26, ensuring strategic portfolio simplification and capital efficiency benefits, said Geojit Investments.

HUL’s performance during the quarter was stable due to strong execution abilities, GST adjustments and a moderate seasonal environment, said Geojit, which retained its 'buy' rating on the stock with a revised target price of Rs. 2,776. Overall, Nuvama stays positive on HUL and retain 'buy' with an unchanged target price of Rs 3,200.

HUL guided low-single digit pricing growth in a stable commodity cost environment and Ebitda margins of 22-23 per cent, ice cream demerger to aid 50 bps margin upside, said PL Capital. We expect 6.9 per cent sales CAGR and 8.3 per cent EPS CAGR over FY26- 28 (post ice cream demerger). We assign DCF based target price of Rs 2772," it added with an 'accumulate' tag.