Mumbai: The board of FMCG giant HUL has decided to wind it up. Ice cream business An independent listed entity, the company said in a statement on Monday. It is proposed that the shareholders of HUL will get shares in the new company in proportion to their shareholding in the firm.
HUL said, “The spin-off of the ice cream business will create a leading listed ice cream company in India, with greater flexibility to deploy strategies as per its unique business model and market dynamics. There will be a focused arrangement, thereby realizing its full potential,” HUL added. A separate listed entity will also unlock fair value for the company’s shareholders.
HUL’s ice cream portfolio which includes brands like Kwality Wall’s, Magnum and Cornetto contributes about 3% of its revenue. In the ice cream category, HUL competes with domestic brands such as Amul, Mother Dairy, Vadelal, Naturals as well as global brands such as Baskin Robbins. A report by retail consulting firm Wazir Advisors says that India’s ice cream market will cross $5 billion by FY25 due to growing demand for premium ice creams. HUL’s premium ice cream segment is doing well on the back of Magnum and in-house orders through online platforms. “Our premium ice cream continues to accelerate significantly ahead of the category,” the firm said in its FY24 annual report.
In September, HUL had set up a committee of independent directors to review the prospects of the company’s ice cream business following parent Unilever’s decision to demerge its ice cream unit into markets. The decision to demerge is subject to board and shareholder approval, which will be placed before the board early next year. Analysts said the demerger is a good move by HUL and will also allow existing investors a pure-play ice cream entity.