HEG shares opened 64% lower at Rs 260 apiece on Monday, following the demerger adjustment on the record date. The stock now excludes the value of the graphite electrodes business, which has been transferred to HEG Graphite. The company's market capitalisation stands at approximately Rs 5,095 crore.
Earlier last month, HEG set September 7 as the record date to determine shareholder eligibility for its demerger. The graphite electrodes business will move to HEG Graphite, which will be renamed HEG and operate as a pure-play graphite electrodes company. The existing listed entity will retain the advanced materials, battery energy solutions, and green power businesses, and will be renamed HEG Advanced Materials post-demerger.
As part of the demerger, HEG shareholders will receive one share with a face value of Rs 2 in the new company for every share held in the existing HEG, maintaining a 1:1 demerger ratio. For instance, an investor holding 10 shares of HEG as of the record date will own 10 shares of HEG and 10 shares of HEG Advanced Materials after the demerger. Only shareholders with HEG shares in their demat accounts on the record date will receive shares in the new company.
“Our immediate focus includes scaling synthetic graphite anode material, where we are developing commercial scale manufacturing capability, while continuing to advance graphene and its applications across industries.”
Riju Jhunjhunwala, Chairman, Managing Director and CEO of HEG Advanced Materials
Additionally, Bhilwara Energy will be amalgamated into HEG, with HEG issuing eight equity shares with a face value of Rs 2 each for every seven equity shares with a face value of Rs 10 each held in Bhilwara Energy, an unlisted company.
The demerger also brought leadership changes effective September 1. Ravi Jhunjhunwala will continue to lead HEG Graphite as Chairman, Managing Director, and CEO, while Riju Jhunjhunwala has been appointed as Chairman, Managing Director, and CEO of HEG Advanced Materials for a five-year term, pending shareholder approval.
Background
HEG's strategic move to demerge its businesses aims to streamline operations and focus on growth areas. The graphite electrodes business will be managed independently, allowing HEG Advanced Materials to concentrate on scaling synthetic graphite anode material and advancing graphene applications.
Investors should monitor the performance of both HEG Graphite and HEG Advanced Materials as they pursue their respective growth strategies. The market will be watching how these entities leverage their focused operations to drive shareholder value.
