HUL Demerger: Share Price Recovers After Sharp Intraday Drop as Kwality Wall’s Spin-Off Takes Effect
HUL shares fall then recover as Kwality Wall’s demerger takes effect; investors to receive 1:1 shares of the new ice-cream entity after record date.
HUL shares slide and recover as the Kwality Wall’s ice-cream business demerger becomes effective on the record date.
Hindustan Unilever Ltd (HUL) shares witnessed sharp volatility on Friday as the company’s long-awaited demerger of its ice-cream business, Kwality Wall’s India, came into effect. The stock opened weak and fell as much as 7% to ₹2,289 during the special pre-open session held to determine its fair value post-demerger. It later trimmed losses and was trading 3% lower at around ₹2,345.
Today, December 5, marks the record date for the demerger. From this session onward, HUL shares are trading ex–ice-cream business, and eligible shareholders will receive one share of Kwality Wall’s India for every one HUL share held, as per the 1:1 entitlement ratio.
Price Discovery & Index Changes
Both BSE and NSE conducted a special pre-open session to adjust HUL’s valuation net of its ice-cream division. Kwality Wall’s India will temporarily enter the Nifty 50 as a dummy symbol at zero price until regular trading of the new entity begins. MSCI and FTSE will also add the demerged company at the discovered price before removing it once the actual listing takes place.
Demerger Details
Effective from December 1, the demerger transfers HUL’s entire ice-cream portfolio—including Kwality Wall’s, Cornetto, Magnum, Feast and Creamy Delight—into a separate entity. SEBI regulations require the new shares to be listed within 60 days of NCLT approval, placing the expected debut sometime in February 2026.
Brokerage firm Nuvama estimates that HUL’s ice-cream business contributes ₹50–55 to the parent’s share price and could list at around 5x EV/sales, compared to HUL’s 9x. The business generates roughly ₹2,000 crore in annual revenue and has a projected growth rate of 15–20%.
Recent Corporate Developments
Ahead of the demerger, HUL reported a 3.6% rise in Q2 net profit to ₹2,685 crore, supported by a one-time tax settlement benefit. Revenue grew 1.5% year-on-year, though EBITDA margins contracted by 90 basis points to 23.2% due to increased investments and GST-related changes.
The company also announced an interim dividend of ₹19 per share for FY26, with a record date of November 7 and payout scheduled for November 20.
Why HUL Is Spinning Off Kwality Wall’s
HUL CEO Rohit Jawa said the ice-cream segment remains a “high-growth business,” and the demerger will allow the company to sharpen its focus on core categories such as personal care, home care, beauty and nutrition. The spin-off provides the ice-cream division greater strategic freedom to scale rapidly as a standalone company while unlocking value for shareholders.
Investors are now awaiting formal listing details for Kwality Wall’s India, with the market preparing for fresh price discovery in the coming weeks.
