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All you need to know about Hindustan Unilever demerger and how it benefits you!

  • Writer: Amar Sharma
    Amar Sharma
  • May 15
  • 2 min read

hindustan unilever demerger

What is a Demerger?

A demerger happens when a company separates one part of its business into a new, independent company. For example, if a company has two businesses—like power and finance—it might split them into two separate companies.


Hindustan Unilever to Demerge Its Ice Cream Business

Hindustan Unilever (HUL), one of India’s biggest FMCG companies, has announced that it will separate its ice cream business and turn it into a new company. The new company will be called Kwality Wall’s (India) Ltd (KWIL). It will include popular ice cream brands like Kwality Wall’s, Cornetto, and Magnum.


Why Is HUL Doing This?

The ice cream business is different from HUL’s other businesses. It needs cold storage, has seasonal demand (sells more in summer), and has a different supply chain. So, HUL wants this business to run separately with its own team and strategy.


By doing this, both HUL and the new ice cream company can focus better and grow faster in their own ways.


What Does It Mean for Shareholders?


  • If you are a shareholder of HUL, you will get one share of the new company for every share you own in HUL.

  • This means you will own shares in two companies: HUL and the new ice cream company (KWIL).

  • You can choose to keep both or sell one—depending on what you prefer.


How Demerger Unlocks Value:


1.Each Business Can Focus Better:


  • After the split, each company can fully focus on its own work.

  • This helps them grow faster and perform better.


2.Stock Market Can See the True Value:

  • When different businesses are in one company, it’s hard to know how much each one is worth.

  • After splitting, investors can see the real value of each business clearly.


3.Clearer Financial Reports:

  • -Each company shows its own profits and losses.

  • -This makes it easier for investors to understand how each one is doing.


4.Attract the Right Investors:

  • A company focused on one business (like only tech or only finance) can attract investors who are interested in that specific area.


5.Better Management:

  • Each business will have its own team of leaders.

  • They can take faster and better decisions for their specific business.



How It Helps Shareholders:


  1. You Get Shares in the New Company Too:


  • -If you owned shares in the old company, you will usually get shares in the new company also.

  • -So now, you own parts of both businesses.


  1. Chances of Higher Returns:


  • When each company does well on its own, their share prices may go up.

  • This can give you better returns on your investment.



  1. More Control Over Your Investment:


    You can choose to keep both companies’ shares, or sell one and keep the other—based on your interest.


  1. Better Dividends (Sometimes):


  • If both companies start making good profits, they may give better dividends to shareholders.




For free mutual fund advisory service from AMFI-registered financial advisors and step-by-step account opening, click here: http://p.njw.bz/38276






Disclaimer: The views expressed in this article are intended for educational purposes only and should not be considered as buy/sell recommendations. Investing in stocks involves financial risk. Please consult a qualified financial advisor before making any investment decisions.

 
 
 

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