HUL Provides Guidance on Cost Apportionment for Demerged Kwality Wall's Shares
Hindustan Unilever Limited (HUL) provided guidance on apportioning the cost of acquisition for HUL and Kwality Wall’s (India) Limited (KWIL) shares post-demerger. Shareholders should allocate 98.09% of their original HUL cost to HUL shares and 1.91% to KWIL shares. The Scheme became effective on December 1, 2025.
This announcement is primarily for shareholder guidance regarding tax treatment of a demerger. It does not involve significant financial transactions, strategic shifts, or operational changes that would materially impact the company's business or stock performance.
The announcement is a procedural update providing guidance on tax implications for shareholders following a business demerger. It does not contain information that would positively or negatively impact the company's financial performance or stock price.
Hindustan Unilever Limited (HUL) has issued a communication to its shareholders regarding the apportionment of the cost of acquisition for equity shares of HUL and Kwality Wall’s (India) Limited (KWIL). This follows the Scheme of Arrangement sanctioned by the National Company Law Tribunal (NCLT) for the demerger of HUL's Ice Cream Business into KWIL.
The Scheme became effective on December 1, 2025, with the same date also serving as the Appointed Date. As per the Scheme, KWIL allotted 2,34,95,91,262 equity shares of Re. 1 each to HUL shareholders as of the Record Date, December 5, 2025. The allotment ratio was 1 KWIL share for every 1 HUL share held.
For tax purposes, shareholders are advised to apportion their total cost of acquisition of HUL shares. The guidance suggests allocating 98.09% of the total cost to HUL shares and 1.91% to KWIL shares. For instance, if shares were bought at ₹400 each, the total cost of ₹4,00,000 would be split, with ₹7,640 attributed to KWIL shares and ₹3,92,360 to HUL shares. This ratio is based on the net worth of HUL and the net assets of the Ice Cream Business Undertaking as of November 30, 2025.
The allotment of KWIL shares is not considered a transfer under Section 47(vid) of the Income Tax Act, 1961. The acquisition date for HUL shares will also be considered the acquisition date for KWIL shares. This communication serves as general guidance, and shareholders are advised to consult their tax advisors for specific implications.
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Hindustan Unilever Limited filed this with the NSE as a statutory disclosure, categorised under other corporate actions. It is a primary document, not a recommendation, and the desk marks it low impact, the band that almost never moves a portfolio on its own.
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