The sharp move in HEG’s share price on Monday does not represent the kind of wealth destruction the headline numbers might suggest. Shares of HEG Advanced Materials Ltd. opened at ₹260 on September 7, the first day of trading after the demerger adjustment, but subsequently climbed 5% from their true adjusted value to hit a day’s high of ₹273.
The apparent plunge becomes clearer when viewed against Friday’s closing price. The stock had ended the previous session at approximately ₹728 before the demerger took effect. With September 7 designated as the official ex-date, the stock exchange recalibrated the trading price of the existing listed company to reflect the business being transferred into a separate entity.
HEG Advanced Materials is the new identity of the erstwhile HEG Ltd. The company has received a fresh certificate of incorporation from the Registrar of Companies, marking another important step towards completing the restructuring.
The composite scheme of arrangement behind the restructuring was approved by the National Company Law Tribunal’s Indore bench on August 13, 2026. The transaction divides HEG’s operations into two businesses, separating the established graphite electrodes manufacturing operation from its newer materials and energy businesses.
The rationale is to give both businesses a more focused structure, with separate listings and dedicated management teams. The advanced-materials and energy operations remain with HEG Advanced Materials, while the graphite electrodes business is being transferred to HEG Graphite Ltd.
HEG Graphite is expected to be renamed HEG Ltd. and operate as a pure-play graphite electrodes producer. Its listing could take place within the next 45 days.
What Do Shareholders Get From The HEG Demerger?
The key feature for existing investors is the 1:1 demerger entitlement. Under the approved scheme, shareholders receive one share in the newly carved-out graphite company for every one share held in HEG as of the record date.
In other words, the restructuring does not simply remove the graphite business from shareholders’ holdings. Instead, the graphite operation is being housed in a separate company, with eligible existing shareholders receiving one share of that company for each share they own.
The scheme also provides for a separate amalgamation involving Bhilwara Energy Limited. Under this arrangement, HEG Advanced Materials Limited will issue eight equity shares with a face value of ₹2 each to existing shareholders of Bhilwara Energy Limited, excluding HEG Advanced Materials Limited, against every seven equity shares of ₹10 each held in Bhilwara Energy.
Leadership
The leadership arrangements have also been laid out for the two resulting businesses. Ravi Jhunjhunwala will head HEG Graphite as Chairman, Managing Director and Chief Executive Officer with effect from September 1, 2026. He will simultaneously remain on the board of HEG Advanced Materials in a non-executive capacity.
At HEG Advanced Materials, Riju Jhunjhunwala serves as Chairman, Managing Director and Chief Executive Officer for a five-year term, subject to shareholders’ approval. He will additionally join the Board of HEG Graphite Limited as a non-executive director.
Riju Jhunjhunwala had earlier described the restructuring as a way to create two focused businesses that could be valued independently. According to him, each entity would have its own strategy, disciplined capital allocation and flexibility to pursue its respective growth opportunities. He also said the sharper focus should allow both businesses to unlock their potential and generate sustainable, long-term value for shareholders.
Emkay Global on HEG
The potential value of the separated businesses has also attracted attention from Emkay Global Financial Services. In a recent research report, the brokerage used a sum-of-the-parts approach and arrived at a combined equity value of over ₹18,000 crore for the two businesses.
That estimate is significant when compared with HEG’s market capitalisation before the September 7 ex-date. The company was valued at around ₹14,000 crore before the adjustment, meaning Emkay’s assessment points to value-unlock potential of over 30% through the demerger.
The brokerage’s valuation is split between the graphite operation and the advanced-materials entity. Emkay assigned the graphite business an equity value of approximately ₹9,700 crore, translating into ₹500 per share. The valuation is based on a 12x multiple of estimated June 2027 EV/EBITDA.
The remaining advanced-materials business was valued at about ₹8,360 crore, or ₹250 per share. This entity includes Bhilwara Energy and the battery-materials unit TACC (The Advanced Carbons Company).
For Bhilwara Energy, Emkay applied a 9x EV/EBITDA multiple. For TACC, the brokerage used a 20x FY28 P/E multiple to arrive at its valuation.
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