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HEG Limited is one of India’s leading graphite electrode makers. It is now going through a big corporate restructuring. This is called the HEG Demerger.
If you own HEG shares, this change will affect your holdings directly. Many investors are confused about what will happen to their shares.
Key Takeaways
- The HEG Demerger will become effective from September 1, 2026.
- September 7, 2026 is the record date for the HEG Demerger.
- Shareholders will get 1 share of the new graphite company for every 1 share of HEG they hold.
- The graphite electrode business will move into a new entity, proposed to be renamed HEG Limited.
- The existing listed company will retain advanced materials, battery, and green power businesses. It is proposed to be renamed HEG Advanced Materials Limited.
- Bhilwara Energy Limited will also merge into HEG as part of the same scheme.
- No action is needed from shareholders. Shares will be credited automatically if you hold HEG shares on the record date.
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What is the HEG Demerger?
1: What is a stock?
A demerger happens when a company splits into two separate businesses. Each business then gets listed on its own. This is exactly what is happening with HEG. The company currently runs two very different kinds of businesses under one roof.
The first is the graphite electrode business. This is a mature, steady business. Its performance depends on global steel demand and electrode prices.The second business includes advanced materials, battery energy storage, and green power. These are newer, growth-focused businesses.
The company is investing in these businesses today with the hope of higher returns in the future.Since these two businesses have very different growth stories, the management decided to separate them. This is the core idea behind the HEG Demerger.
Why is HEG Doing this?
Investors often value mature businesses and growth businesses differently. When both are combined in one company, the stock price may not fully reflect the value of either one.
By splitting the company, each business can be valued on its own merits. This is often called “value unlocking” in the stock market.
The graphite electrode business will become a pure-play company. It can focus fully on steel demand and electrode pricing.
The other business can focus on scaling up newer areas like battery materials and energy storage, without being tied to the electrode cycle.
Key Dates You Should Know
Two dates matter most in the HEG Demerger.
| Effective Date: September 1, 2026 | This is when the Composite Scheme of Arrangement legally comes into force. The company structure officially changes from this date. |
| Record Date: September 7, 2026 | This is the most important date for shareholders. If you hold HEG shares on this date, you become eligible to receive shares of the new company. The record date decides who gets the new shares. It has nothing to do with when you bought the shares. It only matters whether you are holding them on that specific date. |
What Happens to Your Shares?
This is the part every shareholder wants to understand clearly.Under the HEG Demerger, the graphite electrode business will move into a new entity, currently called HEG Graphite Limited. This entity is proposed to be renamed HEG Limited once approvals come through. It will be a pure-play graphite electrode company.
The existing listed company will keep the advanced materials, battery energy solutions, and green power businesses. It is proposed to be renamed HEG Advanced Materials Limited.
The share entitlement ratio is simple: 1:1. This means for every one share of HEG you hold on the record date, you will receive one share of the new graphite company.
Your existing shares in the original company are not cancelled. You continue to hold them, just under the new name.
For example, if you hold 100 shares of HEG on September 7, 2026, you will continue to hold 100 shares in HEG Advanced Materials Limited. You will also receive 100 additional shares in the new graphite entity. So your total share count effectively doubles, but each set of shares now represents a separate, focused business.
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Know moreWhat about Bhilwara Energy?
As part of the same scheme, Bhilwara Energy Limited is being merged into HEG.
Shareholders of Bhilwara Energy will receive eight equity shares of HEG (face value Rs 2) for every seven shares of Bhilwara Energy (face value Rs 10) they hold.
This is a separate part of the overall scheme, but it is happening alongside the HEG Demerger.
Leadership Changes after the Demerger
Along with the business split, the company has also announced new leadership roles.
Ravi Jhunjhunwala will lead the graphite business as Chairman, Managing Director, and CEO from September 1, 2026. He will also stay on the board of the advanced materials company.
Riju Jhunjhunwala has been made Chairman, Managing Director, and CEO of the advanced materials company. His term is for five years, subject to shareholder approval.
These leadership changes are simply a part of setting up the two-company structure. They do not reflect any change in business performance.
Do Shareholders Need to Do Anything?
No. This is the most reassuring part of the HEG Demerger for regular investors. If you already hold HEG shares in your demat account, the new shares will be credited automatically after the record date. There’s no need to apply, request, or take any special action from your end.
However, it is a good idea to check your demat account a few weeks after the record date. This is to confirm whether the new shares have been credited.
If you plan to buy or sell HEG shares around early September, be aware that share prices may adjust to reflect the split of businesses. This is normal and expected during any demerger.
4 Key Points Investors Should Watch for
- Listing of the new entity: After the demerger, the graphite business will need to get listed separately on the stock exchanges. This can take a few weeks after the record date.
- Price adjustment: Once the demerger takes effect, the price of the original HEG stock is likely to adjust downward. The reason is part of its value now belongs to the new graphite entity.
- Pending Approvals: The proposed name changes for both companies still need approval from the Registrar of Companies and other authorities.
- Evaluate separately: In the future, investors will need to evaluate the graphite business and the advanced materials business separately. It is because they will have different growth drivers and risks.
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Conclusion
The HEG Demerger is a significant restructuring move. It aims to separate a mature, steady graphite electrode business from newer, growth-focused businesses like battery materials and green energy. For shareholders, the process is straightforward.
If you hold HEG shares on September 7, 2026, you will automatically receive shares in the new graphite entity on a 1:1 basis. There is absolutely no need for any paperwork or action from your end.
The HEG Demerger reflects a broader trend among Indian companies to unlock value by separating businesses with different growth profiles. As always, before making any investment decisions around the demerger, always give priority to your own financial goals and risk appetite. Or else speak with a qualified financial advisor.
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Know moreFrequently Asked Questions
What is the HEG Demerger?
It is the process where HEG Limited is splitting its graphite electrode business from its advanced materials and energy businesses into two separate listed companies.
What is the record date for the HEG Demerger?
September 7, 2026 is the record date. You must hold shares on this date to be eligible for new shares.
What is the share entitlement ratio?
Shareholders will receive one share of the new graphite company for every one HEG share they hold.
Do I need to apply for the new shares?
No. Shares will be credited automatically to your demat account if you are eligible.
Will my existing HEG shares be cancelled?
No. You will continue holding your existing shares under the new company name.
When does the demerger become effective?
The scheme becomes effective from September 1, 2026.
What happens to the HEG share price after the demerger?
The price may adjust downward, since part of the company’s value moves to the new graphite entity.
