Stocks witnessed sustained selling on the NSE with over 3 crore shares changing hands around 1:40 pm.
Quality Wall, which was demerged from FMCG major Hindustan Unilever Ltd (HUL), on Monday traded at Rs. 29.80 which was listed at Rs. 40.20 implying a 26% discount from the ex-demerger price.
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Quality Wall used to handle HUL’s ice cream business and was demerged to unlock the value of that business. The listing comes after HUL received approvals from both BSE and NSE for 2,34,95,91,262 equity shares of the standalone entity, marking the formal culmination of one of the company’s most significant portfolio restructurings in recent years.
December 5 was fixed as the record date for determining the eligible shareholders. Under the approved scheme, investors holding HUL shares till that date received one share of Quality Wall for every share held, paving the way for India’s first pure-play listed ice cream company to enter the public markets.
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In a separate exchange filing earlier in the day, the company said Magnum ice cream company Holdco 1 Netherlands BV has launched an open offer to acquire up to 26% of the company’s voting share capital. With the appointment of Kotak Mahindra Capital Company Limited as the manager of the open offer, the offer price per share is Rs. 21.33 has been fixed.
Institutional investor Life Insurance Corporation of India (LIC) acquired 6.62% stake (15.56 crore) in the company.
Local brokerage estimates were earlier at Rs. 50-55 suggests a potential valuation, reflecting the seasonal nature of the series and relatively low margin profile. While the reduction of GST on ice cream from 18% to 5% is expected to support affordability and demand, the business continues to face challenges related to seasonality and profitability.
SBI Securities remains ‘Neutral’ on the stock.
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