HEG share price adjustment reflects upcoming graphite business demerger
HEG Ltd’s apparent 64 percent stock price collapse is a mechanical exchange adjustment ahead of its corporate split, preserving shareholder value across two newly distinct entities.
HEG Ltd’s stock appeared to plummet 64 percent to around ₹260 in Monday trading, down from Friday’s close of approximately ₹728. This sharp decline is not a market sell-off but a mechanical price adjustment by the stock exchange to mark the official ex-date of the company’s demerger.
Far from indicating financial distress, the stock actually gained 5 percent to reach a day’s high of ₹273 against the newly adjusted base price. The perceived wealth erosion is purely cosmetic, as the underlying value is being repositioned rather than destroyed.
Dual Entity Structure
Under the approved scheme of arrangement, the company is splitting into two distinct entities on a 1:1 ratio. Shareholders holding one fully paid-up equity share of the existing company will receive one fully paid-up equity share of face value ₹2 in the newly formed graphite business.
The existing listed entity will be renamed HEG Advanced Materials Ltd. This company will retain the advanced materials, battery energy solutions, and green power businesses, focusing on carbon applications and related technologies.
The second entity, HEG Graphite, will operate as a pure-play graphite electrode business. It is scheduled for a separate stock exchange listing in the second half of October 2026, after which it will be renamed HEG Limited.
Ravi Jhunjhunwala will assume the roles of Chairman, Managing Director, and Chief Executive Officer of HEG Graphite Limited effective September 1, 2026. He will concurrently maintain his position as a director on the board of HEG Advanced Materials Limited.
The corporate restructuring also includes an amalgamation arrangement with Bhilwara Energy Limited. HEG Advanced Materials Limited will issue eight equity shares of ₹2 each to Bhilwara Energy shareholders for every seven equity shares of ₹10 they currently hold, excluding shares already held by HEG.
For investors, this restructuring clarifies the valuation of HEG’s diverse operations. Separating the graphite electrode business from emerging green power and battery energy segments allows the market to price each entity according to its specific growth profile.
