BUSINESS

HUL Demerger: What Changed and Why It Matters

HUL has recently completed the demerger of its ice-cream and frozen-desserts business , including brands such as Kwality Wall’s, Cornetto, Magnum, Feast and Creamy Delight, into a new standalone company, Kwality Wall’s (India) Ltd. (KWIL). 

The separation became effective on 1 December 2025, with the record date for shareholders set as 5 December 2025. On that date, every shareholder holding 1 share of HUL became eligible to receive 1 fully paid-up share of KWIL. This demerger forms part of a strategic shift: HUL aims to focus more sharply on its core business areas, home care, beauty & personal care, and other high-margin segments, while allowing the ice-cream business to operate independently with its own strategy, management and capital structure. 

KWIL, once listed, will become a pure-play ice-cream company. Industry analysts believe it could be India’s first large-scale, listed company dedicated solely to ice cream / frozen desserts.

Market Reaction: HUL Shares Adjust, Some Volatility

As expected with such corporate restructuring, the market reacted swiftly. On 5 December 2025 (the record date), HUL’s share price initially plunged around 7% to hit a day’s low of approximately ₹2,289 on the BSE. The fall reflected the fact that the ice-cream business no longer remains part of HUL, and the stock traded “ex-ice-cream business.” Consequently, investors recalibrated the valuation of HUL, excluding the future standalone value of KWIL. 

After initial volatility, the stock recovered some ground to close around ₹2,339–₹2,341. That said, the demerger also implies that existing HUL shareholders have exposure to two separate entities now, HUL’s core business and the new ice-cream venture, which may offer more transparent valuations for both.

What’s Next: KWIL Listing, Valuation, and HUL Outlook

According to broker estimates, KWIL,  the demerged ice cream business, could be valued at ₹50–55 per share at listing, which is expected around February 2026, subject to regulatory approval. Analysts see potential upside for both companies. 

For HUL, the separation allows a sharper strategic focus on its high-margin FMCG categories. For KWIL, being a dedicated ice-cream company may allow agile growth and brand expansion in a competitive but high-potential frozen desserts market. 

At the same time, KWIL’s listing could open a new chapter for ice-cream investors. If the ₹50–55 per-share valuation holds, investors who receive KWIL shares may see a separate upside from HUL’s core operations.

What This Means for Ordinary Investors?

For ordinary investors, the HUL–KWIL demerger simply means that anyone who held HUL shares before 5 December now owns shares in two separate companies, HUL and the newly formed Kwality Wall’s (India) Ltd. The fall in HUL’s share price after the record date does not signal any decline in the company’s performance; it is only a technical adjustment because the ice-cream division has been carved out. 

By holding both HUL and KWIL, investors now get exposure to two different kinds of businesses: HUL’s stable, diversified FMCG portfolio and KWIL’s focused, high-growth ice-cream segment. As India’s frozen-dessert market expands, KWIL could unlock fresh opportunities, while HUL, now leaner and more streamlined may improve profitability. Overall, the restructuring aims to unlock value by creating two clearer, more focused companies, offering investors greater transparency, flexibility, and potentially better long-term growth visibility.