The demerger of the Advanced Materials business of LNJ Bhilwara Group company HEG is expected to unlock substantial shareholder value and strengthen the market position of both resulting listed entities. According to leading brokerages tracking the company, the combined market capitalisation of the two listed companies could rise to around ₹18,000 crore from the current ₹14,000 crore. This represents a potential value unlocking of approximately 30% following the restructuring.
HEG to Separate Graphite Electrode Business
Under the proposed restructuring scheme, HEG Advanced Materials will retain its growth-oriented businesses. These include battery materials, graphene, battery energy storage and green power. Meanwhile, the company’s established graphite electrode business will be transferred to a newly formed entity, HEG Graphite. The new company is expected to be listed on the BSE and NSE approximately 45 days after completion of the demerger, with the listing likely to take place in the second half of October. The separation will allow the two businesses to pursue distinct growth strategies while enabling investors to independently value HEG’s advanced materials and graphite electrode operations.
One-to-One Share Entitlement for Investors
The restructuring scheme also provides a straightforward shareholding arrangement for existing investors. Under the proposed one-for-one share entitlement, shareholders will receive one share of HEG Graphite for every one share held in HEG Advanced Materials. As a result, existing shareholders will retain exposure to both businesses following the demerger, while the separate listings could provide greater visibility into the individual value and growth prospects of each entity.
Demerger Could Enhance Shareholder Value
The proposed restructuring marks a significant step in HEG’s strategy to create focused businesses around its traditional graphite operations and emerging advanced materials portfolio. Furthermore, the separate listing of HEG Graphite could improve business transparency and provide investors with a clearer basis for valuing the company’s graphite electrode operations. At the same time, HEG Advanced Materials can focus on higher-growth opportunities across battery materials, graphene, energy storage and green power. As reported by thehindubusinessline.com, the demerger could provide a potential 30% value-unlocking opportunity, while positioning both businesses to pursue their respective growth strategies more independently.
