Hindustan Unilever Limited (HUL), a leading FMCG company in India, has successfully completed the demerger of its ice cream business to Kwality Wall's (India) Limited (KWIL). Following the completion, the company has issued detailed guidance to shareholders regarding the apportionment of acquisition costs for their shareholdings.

Demerger Completion Details

Kwality Wall's (India) Limited has officially completed the share allotment process following the approved demerger scheme. The Board of KWIL, at its meeting held on December 12, approved the allotment of shares to eligible HUL shareholders.

Cost Apportionment Guidelines

HUL has provided shareholders with specific guidance on apportioning their total cost of acquisition between HUL and KWIL shares post-demerger. The apportionment ratio has been determined based on the net worth of HUL and the net assets of the Ice Cream Business Undertaking as of November 30.

Practical Example

For shareholders who purchased 1,000 HUL shares at ₹400.00 per share (total cost ₹4,00,000.00), the cost apportionment would be:

Regulatory Compliance and Tax Implications

The demerger has been structured in accordance with Section 2(19AA) of the Income Tax Act, 1961. Under Section 47(vid) of the Act, the allotment of KWIL equity shares will not be regarded as a transfer. Additionally, as per explanation 1(i)(g) to Section 2(42A) of the Act, the date of acquisition of HUL equity shares will be deemed to be the date of acquisition for KWIL equity shares.

Corporate Structure Changes

As part of the demerger process, KWIL's Board has approved the cancellation and reduction of its entire pre-scheme paid-up share capital comprising 5.00 crore fully paid-up equity shares of ₹1.00 each, which was entirely held by HUL. Consequently, KWIL has ceased to be a wholly-owned subsidiary of Hindustan Unilever with effect from December 12.

Listing and Governance Structure

KWIL will take necessary steps to obtain listing and trading permission for the allotted equity shares from BSE Limited and National Stock Exchange of India Limited. The newly allotted equity shares will remain frozen until listing and trading permission is granted by the stock exchanges. The company has established statutory committees required for a listed company and appointed senior managerial personnel to support its operations as an independent entity.

Hindustan Unilever Limited (HUL) has announced significant developments in its demerger scheme with Kwality Wall's (India) Limited (KWIL). The company has set key dates for the implementation of the scheme and made important board appointments.

Scheme Implementation Timeline

HUL's Board of Directors has confirmed that the Scheme of Arrangement between HUL and KWIL will become effective from December 1, 2025. This date marks the first calendar day of the month following the completion of all conditions specified in Clause 20 of the Scheme.

Key dates for the demerger process include:

The Record Date is set for determining eligible HUL shareholders who will receive KWIL shares. The share entitlement ratio is 1:1, meaning shareholders will receive one equity share of KWIL (face value Re. 1) for every one equity share held in HUL (face value Re. 1).

Board Appointments and Changes

In addition to the demerger updates, HUL has made significant changes to its board:

1. Ritesh Tiwari: Appointed as an Additional Non-Executive Director of KWIL, effective November 17, 2025. Mr. Tiwari, currently the Global Head M&A, Treasury and Ventures of Unilever PLC, brings extensive experience in finance leadership across global markets.

2. Bobby Parikh: Appointed as an Independent Director on HUL's Board for a five-year term, from December 1, 2025, to November 30, 2030. Mr. Parikh will also serve as the Chairman of the Risk Management Committee and a member of the Audit Committee.

Expert Commentary

Nitin Paranjpe, Non-Executive Chairman of HUL, commented on Bobby Parikh's appointment: "We are delighted to welcome Bobby to the HUL Board as an Independent Director. His experience, combined with expertise in financial strategy and regulatory frameworks, has helped organisations steer complex transformative business changes. We look forward to his insights and contributions in the Company's next phase of growth."

Mr. Parikh expressed his thoughts on joining HUL's board: "It is an honour to join the Board of Hindustan Unilever Limited, a company that has set benchmarks in corporate governance and responsible business. I look forward to working with my fellow Board members and the leadership team to help steer HUL through new opportunities and challenges."

These developments signify HUL's strategic moves in restructuring its business and strengthening its governance structure as it prepares for the next phase of growth in the Indian market.