But as soon as the company announced the spin-off of its graphite business, traders started to dump the stock.
On Thursday, it declined 7% to hit a day's low of2,509.20.Graphite electrode manufacturer HEG has approved the demerger of its graphite business into a new company, and the merger of Bhilwara Energy with itself.
"The equity shares to be issued by the resulting company will be listed on both BSE and the NSE.
HEG in an update said the segregation of businesses with varying risk and return profiles offers shareholders greater flexibility to align their investments with their strategies and risk preferences, effectively de-risking the graphite business.
"This will enable the full value of each of the businesses to be unlocked for the benefit of the shareholders."
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Shares of HEG Ltd. have rallied 60% in the last six-month period. But as soon as the company announced the spin-off of its graphite business, traders started to dump the stock. On Thursday, it declined 7% to hit a day's low of2,509.20.Graphite electrode manufacturer HEG has approved the demerger of its graphite business into a new company, and the merger of Bhilwara Energy with itself. This move is intended to unlock value for shareholders.The turnover of the graphite business was 94.41% of the company's total turnover in the financial year 2024.The listing of the graphite business is expected to be completed in 2025, HEG said.The existing company will be turned into a platform for green energy businesses, hydro and wind energy, advanced carbon business and other opportunities in the new age businesses, according to a company notification on May 22.The demerger will result in a share swap ratio of 1:1, while for the merger, HEG said, "8 fully paid-up equity shares of10 each of the transferee company, for every 35 equity shares of10 each of the transferor company."The equity shares to be issued by the resulting company will be listed on both BSE and the NSE. HEG in an update said the segregation of businesses with varying risk and return profiles offers shareholders greater flexibility to align their investments with their strategies and risk preferences, effectively de-risking the graphite business."The existing company and the new company will script new paths as two independent, publicly listed companies. The underlying growth drivers, risk profile and capital allocation requirements are fundamentally different in the Graphite business compared to the green energy business," said Ravi Jhunjhunwala, Chairman and Managing Director, CEO of HEG Ltd.Jhunjhunwala said the scheme will enable both companies to pursue their strategies and have focused management. "This will enable the full value of each of the businesses to be unlocked for the benefit of the shareholders."
