HUL shares gain as board greenlights ice cream arm spin-off

Hindustan Unilever shares have traded flat over the past year, slipping about 1.4 percent.

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26 Aug, 2025 12:21

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India's largest consumer staples player Hindustan Unilever Ltd. (HUL) stock rose in the morning deals on November 26, after its board granted an in-principle approval to the demerger of its ice cream business into a separate entity.

The ice business will eventually be listed independently, the company informed stock exchanges on November 25.

At 9.20 am, shares of HUL were trading at Rs 2,485.8 on the NSE, higher by 0.6 percent.

"The decision to demerge is subject to approval of the Board and the shareholders to the scheme of demerger to be placed before the board early next year. The Board considered different modes of separation of the ice cream business and after due consideration, with a view to maximise value for all the shareholders, the board has accorded in-principle approval to demerge the business," the company said.

Shareholders will receive shares in the new entity in proportion to their shareholding in HUL, the statement added. "A separate listed entity will unlock fair value for HUL shareholders and give them the flexibility to stay invested in ice cream’s growth journey," Hindustan Unilever said in the statement.

Also Read | Ice cream business is high growth but also high investment & low margin: HUL CEO Rohit Jawa

After the September quarter earnings, HUL CEO Rohit Jawa too had mentioned about the two primary options before the company for separating the business - selling it, or demerging and listing it as a separate entity.

"These are both the options that the board is evaluating and the board has appointed an independent committee to review the way forward. The committee will work upon and then guided by committees' reviews, the board will decide to mode of separation between these two lead options," Jawa had said in October.

For HUL, the ice cream business is a high-growth segment with strong brands like Kwality
Wall’s, Cornetto and Magnum operating with 'mid to high-single digit profitability'. The ice cream category has maintained its volume vis-à-vis last year, during the September quarter.

The demerger will create a "leading listed ice cream company in India, which will have a
focused management with greater flexibility to deploy strategies suited to its distinctive business model and market dynamics," HUL said.

Hindustan Unilever shares have traded flat over the past year, slipping about 1.4 percent, as the depressed sentiment for the consumer staples sector weighed. In contrast, the Nifty 50 recorded a 12 month run of around 22 percent.

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