HEG Stock Plunges: Is It a Crash or Just a Split?

On September 7, 2026, HEG Ltd shares showed a significant 65% decline in morning trade. However, this steep drop was primarily an optical illusion resulting from the company's demerger, not an actual collapse in shareholder value. The stock traded around Rs 258, a stark contrast to Friday's closing price of Rs 728.25.

The demerger involved separating HEG's graphite electrode business from its advanced materials and energy divisions. The existing listed entity, now renamed HEG Advanced Materials Ltd, will focus on advanced materials, battery energy solutions, and green power, incorporating Bhilwara Energy Ltd.

The graphite electrode business has been transferred to HEG Graphite Ltd, which is proposed to be renamed HEG Ltd and will be separately listed as a pure-play graphite electrode company. This move explains the apparent stock price drop, as the value of the graphite business was removed from the price of the existing listed company.

Investors holding HEG Advanced Materials shares on the September 7 record date are eligible to receive one fully paid-up share of HEG Graphite for every share they hold. The graphite company's shares are slated for a separate listing in the latter half of October 2026. Until then, their value won't be reflected in HEG Advanced Materials' market price, making direct price comparisons misleading.

Prior to the demerger, HEG had a market capitalization exceeding Rs 11,500 crore. Post-demerger, the listed entity was valued at over Rs 5,000 crore in Monday's morning trade. The remaining value will be represented by the separately listed graphite business. Riju Jhunjhunwala will lead HEG Advanced Materials, while Ravi Jhunjhunwala will head HEG Graphite.