Kwality Wall's shares jump 5%, snap two-session losing streak

Kwality Wall’s share price

• Kwality Wall's shares rose 5%, leading gains on Sensex, Nifty
• Magnum to buy 26% stake at Rs 21.33 per share via open offer
• HUL shareholders got 1:1 shares in Kwality Wall's after demerger

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The shares of Kwality Wall's (India) gained 5 percent on February 18 to close in the green for the first time since listing. It emerged as the top gainer on the Indian benchmark indices Sensex and Nifty.

The shares of the company rose to Rs 29.34 apiece. The stock had made their much-anticipated market debut on February 16, listing at nearly 26 percent discount at Rs 29.80 apiece on NSE after its demerger from FMCG major Hindustan Unilever (HUL).

On its debut day, the stock had gained around 5 percent to Rs 31.29 apiece, the highest level so far, before paring all gains to close in the red.

Magnum makes open offer for 26% stake in Kwality Wall's:

In an exchange filling, Kwality Wall's on February 16 announced that its India parent The Magnum Ice Cream Company is set to acquire 26 percent stake in the company through an open offer at Rs 21.33 apiece. This implies a 28 percent discount from the stock’s listing price.

About HUL-Kwality Wall's demerger:

Earlier in November 2024, HUL approved the demerger of the ice cream business, which operates popular brands including 'Kwality Wall's', 'Cornetto' and 'Magnum'. National Company Law Tribunal (NCLT) approved the demerger scheme on October 30.

The ice cream business forms 3 percent of HUL's total yearly turnover, contributing Rs 1,800 crore to the total revenue.

Demerger ratio:

The share entitlement ratio was set at 1:1. This means that every shareholder of HUL will receive one share of the ice cream business for every share of the FMCG major they own, as on the record date.

Record date:

The allotment date was fixed at December 29. The record date to determine the eligibility of the shareholders set to receive the free shares was set on December 5. This means that those HUL shareholders whose names appear in the register of members as on the record date will be entitled to receive free shares of KWIL as part of the demerger.