Hindustan Unilever's Ice Cream Business Demerger Approved by NCLT

Kwality Wall's Set to Become an Independent Listed Ice Cream Company

In a significant corporate restructuring move, the National Company Law Tribunal (NCLT), Mumbai Bench-I, has sanctioned the Scheme of Arrangement for the demerger of Hindustan Unilever Limited's (HUL) Ice Cream Business Undertaking to Kwality Wall's (India) Limited. This decision, delivered on October 30, 2025, marks a pivotal step in creating a standalone listed entity focused solely on the ice cream sector.

The tribunal, presided over by Shri. Prabhat Kumar and Shri Sushil Mahadeorao Kochey, found the scheme to be fair, reasonable, and compliant with the law, ensuring it aligns with public policy. The demerger is set to sharpen focus on respective business strategies, enhance shareholder value, and leverage global ice cream business expertise.

Key Details of the Judgment:

• 1. Scheme Overview: The Scheme of Arrangement involves the separation of HUL's Ice Cream Business Undertaking to Kwality Wall's (India) Limited, creating an independent company that will focus on ice cream production and sales. This initiative is in response to Unilever PLC's global strategy of separating its ice cream business.

• 2. Share Entitlement Ratio: Shareholders of HUL will receive one equity share of Kwality Wall's for every equity share held, maintaining a 1:1 share entitlement ratio. This ensures equitable distribution of shares to existing shareholders post-demerger.

• 3. Compliance with Statutory Requirements: The judgment mandates compliance with various statutory requirements, including adherence to regulations set by the Income Tax Department, GST Departments, SEBI, and RBI guidelines. This ensures that the transition adheres to all legal and financial obligations.

• 4. Creditors' Claims: Creditors of the Ice Cream Business Undertaking will be entitled to make claims against Kwality Wall's post-demerger. The tribunal directed HUL to ensure Kwality Wall's is equipped to fulfill these obligations, safeguarding creditor interests.

• 5. Rationale and Benefits: The demerger aims to unlock value for shareholders, provide focused management, and enhance strategic flexibility. Kwality Wall's will benefit from global expertise, brand resources, and innovation, positioning it for growth in the high-demand ice cream market.

• 6. Regulatory and Compliance Directions: The tribunal directed HUL and Kwality Wall's to comply with various regulatory requirements, including filing necessary documents with the Registrar of Companies and obtaining stamp duty adjudication.

The NCLT's decision is a milestone in HUL's strategic restructuring efforts, paving the way for Kwality Wall's to emerge as a leading player in India's ice cream industry. As the transition unfolds, both companies are expected to maintain their growth trajectories while maximizing shareholder value.

Bottom Line:

Scheme of Arrangement sanctioned between Hindustan Unilever Limited and Kwality Wall's (India) Limited, separating Ice Cream Business Undertaking to create an independent listed ice cream company.

Statutory provision(s): Companies Act, 2013 Sections 230, 232

Hindustan Unilever Limited, (NCLT)(Mumbai Bench-I) : Law Finder Doc Id # 2802019