HEG Shares Show 63% Fall After Demerger Adjustment; Here’s What Changed

HEG Ltd shares appeared to fall more than 63% in Monday’s trade, but the sharp drop came after the stock price was adjusted for the company’s demerger. The restructuring will split the existing business into two separately listed companies. 

The stock opened at ₹265 on the BSE on Monday, compared with Friday’s closing price of ₹729.05. The opening price reflected the adjustment made following the demerger. 

After opening at the adjusted level, HEG shares gained 5% and touched the upper circuit at ₹278.20. The stock later gave up those gains and was trading nearly flat at ₹266.65 at around 12:50 PM. 

What Has Changed at HEG? 

Following the restructuring, the existing listed company will retain HEG’s advanced materials, battery energy solutions and green power businesses. The company has now been renamed HEG Advanced Materials Limited, according to an exchange filing cited in the report. 

The graphite electrodes business, meanwhile, will be transferred to the resulting company, HEG Graphite Limited. This entity is proposed to be renamed HEG Limited and will operate as a separately listed company focused on the graphite electrodes business. 

HEG Ltd’s board had approved the demerger into two listed entities and fixed September 7 as the record date. 

What Will HEG Shareholders Receive? 

Under the Composite Scheme of Arrangement, shareholders will receive one equity share of the resulting company for every one equity share held in HEG as of the record date. 

Both shares carry a face value of ₹2, making the entitlement ratio 1:1. 

The shares of the demerged company are expected to be listed on the BSE and NSE within 45 days, placing the expected listing in the second half of October. 

This means Monday’s displayed decline needs to be viewed in the context of the demerger adjustment rather than simply as a regular 63% fall in the stock during trading. 

Bhilwara Energy Also Part of the Restructuring 

The same restructuring scheme also covers Bhilwara Energy Limited, the LNJ Bhilwara Group’s flagship entity in the power sector. 

Bhilwara Energy will be amalgamated with HEG Advanced Materials Limited and dissolved without winding up. 

Under the amalgamation terms, shareholders of Bhilwara Energy Limited will receive eight equity shares of HEG Advanced Materials Limited, carrying a face value of ₹2 each, for every seven equity shares of Bhilwara Energy Limited held by them. The Bhilwara Energy shares involved in the swap carry a face value of ₹10 each. 

With the demerger taking effect, HEG’s graphite electrodes operations and its other businesses are being separated into independently listed entities, while the market price of the existing listed company has been adjusted to reflect the changed business structure.