HUL Ice Cream Business Demerger: Check Impact on Your Holdings and F&O Position

As Hindustan Unilever approaches the completion of its long-awaited demerger of the ice-cream business, Kwaility Walls, markets are gearing up for a busy week marked by price adjustments, index reshuffles and changes in the derivatives segment. The key milestone arrives on Friday, the record date for spinning off Kwality Wall’s into an independently listed company.

Record Date and Share Entitlement

HUL has set December 5 as the record date for the scheme of arrangement with Kwality Wall’s. Shareholders will receive one share of the new company for every HUL share held, based on a 1:1 entitlement ratio. To receive demerger shares, investors must ensure they hold shares in their demat account before the ex-date.

F&O Adjustments and Special Pre-Open Session

All existing HUL F&O contracts will expire at the end of trading on December 4. On the record date, exchanges will conduct a special pre-opening session to discover HUL’s adjusted price post spin-off, an event typically announced four to seven days in advance. Following price discovery, exchanges will introduce fresh F&O contracts aligned with the restructured entity.

Index Treatment: MSCI, FTSE, Nifty and Sensex

MSCI and FTSE will temporarily include Kwality Wall’s on the record date at the discovered price and remove it once trading in the newly listed company begins. Nifty and Sensex will follow a similar method by adding the spun-off company as a dummy zero-priced stock alongside HUL on T-1.

The dummy price will reflect the difference between HUL’s previous close and the discovered price. If the discovered price matches or exceeds the earlier close, the dummy security remains at zero until the new entity lists.

Listing Timeline and Post-Listing Index Removal

The listing of Kwality Wall’s may take up to a month, depending on regulatory approvals. Once the stock begins trading, the exchanges will monitor its behaviour before removing it from indices.

• NSE: Removal occurs after the third trading day, provided the stock does not hit upper or lower circuits for two consecutive sessions. If it does, exclusion is delayed until two stable sessions occur. A press release is issued, and removal follows on the next trading day.
• BSE: Similar rules apply, but only the lower circuit is considered; even if the stock hits it on the scheduled exclusion day, the removal will still proceed.

Also Read: SBI Discontinues mCash From Today: How Customers Can Transfer and Receive Money?

Conclusion

With HUL undergoing one of its most significant restructurings in recent years, traders are positioning themselves for the stock’s adjustment and the arrival of a new standalone FMCG player on the exchanges.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.