Pranav B Prem

The National Company Law Tribunal (NCLT), Mumbai Bench-I, has sanctioned the scheme of arrangement involving the demerger of Hindustan Unilever Limited’s (HUL) ice cream business into its wholly-owned subsidiary, Kwality Wall’s (India) Limited. The order, delivered on October 30, 2025, by the Bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar, marks a major milestone in Unilever PLC’s global restructuring strategy to create a standalone ice cream entity.

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The scheme, filed under Sections 230–232 of the Companies Act, 2013, envisages the transfer of HUL’s ice cream business—comprising iconic brands such as Kwality Wall’s, Cornetto, and Magnum—into a new, independently listed company. The demerger aims to enable sharper operational focus, optimized capital allocation, and enhanced shareholder value. HUL shareholders will receive one fully-paid equity share of Kwality Wall’s (India) Limited for every share held in HUL, in a 1:1 ratio as recommended by Deloitte India Valuation LLP and supported by a fairness opinion from Kotak Mahindra Capital Company Limited.

The Board of Directors of both HUL and Kwality Wall’s approved the scheme in their respective meetings on January 22, 2025. The appointed date for the demerger is defined as the first calendar date of the month following the fulfillment of all requisite conditions under Clause 20 of the scheme. HUL’s counsel, Senior Advocate Gaurav Joshi, assisted by Advocates Tapan Deshpande and Aekaanth Nair from Cyril Amarchand Mangaldas, appeared before the tribunal.

The NCLT recorded that no objections had been raised by any shareholders or creditors. The Regional Director, Western Region, filed a report on October 8, 2025, to which HUL and Kwality Wall’s responded through affidavits, undertaking to safeguard the interests of creditors, employees, and regulatory authorities. The companies assured compliance with accounting standards, tax and GST laws, SEBI regulations, and the directions of the Income Tax and GST departments. The scheme was also found consistent with Section 2(19AA) of the Income-Tax Act, 1961.

The tribunal emphasized that the demerger was justified on multiple grounds. It would enable both companies to pursue independent growth strategies—HUL focusing on its core high-growth segments and Kwality Wall’s building a specialized presence in the ice cream industry. The order also clarified that all liabilities and obligations related to the ice cream business would vest with Kwality Wall’s, while HUL would ensure that its subsidiary is adequately positioned to meet these responsibilities.

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Holding that the scheme was fair, reasonable, and not contrary to public policy, the NCLT approved it in full. It directed both companies to file the sanctioned scheme with the Registrar of Companies within 30 days and with the Stamp Authorities within 60 days. Additionally, the tribunal instructed stock exchanges, depositories, and other regulatory bodies to act upon the certified copy of the order. The approval of this demerger paves the way for the listing of a new ice cream company under Unilever’s portfolio in India, unlocking long-term value for shareholders and strengthening both entities’ operational efficiency and market focus.

Appearance

For the Applicant: Senior Advocate Gaurav Joshi with Advocate Tapan Deshpande and Advocate Aekaanth Nair instructed by Amarchand Mangaldas

Cause Title: Hindustan Unilever Limited And Kwality Wall's (India) Limited

Case No: CP (CAA) NO. 201/MB/2025

Coram: Judicial Member Sushil Mahadeorao Kochey, Technical Member Prabhat Kumar