HEG Limited Share price declined by almost six percent in today's trading session as Indian markets witnessed selling pressure across the board. HEG Limited stock opened the trading session at Rs 2374 but soon declined to low of Rs 2187. The stock closed 5.7 percent down at Rs 2220.

HEG has made a strategic acquisition by purchasing an 8.23% stake in GrafTech International Limited, a New York Stock Exchange-listed company. This investment, valued at ₹248.62 crore, aligns with HEG's core business, as GrafTech is a prominent player in the graphite electrode industry, crucial for steel production. The move comes amid HEG’s larger plans to demerge its graphite business and focus on green energy initiatives. The demerger and merger strategy is designed to unlock shareholder value, with the graphite business slated for listing by 2025.

Strategic Stake Acquisition by HEG Ltd

HEG Ltd acquires 8.23% of GrafTech International Ltd In a notable move, HEG Ltd announced its acquisition of an 8.23% stake in GrafTech International Ltd., a global leader in graphite electrode manufacturing. The transaction, conducted via secondary market purchases under the Foreign Exchange Management (Overseas Investment) Rules of 2022, underscores HEG's commitment to expanding its presence in the graphite electrode industry, which is essential for electric arc furnace steel production.
Investment details of ₹248.62 crore
HEG’s acquisition of GrafTech’s shares represents a substantial financial commitment amounting to ₹248.62 crore. This investment strengthens the company’s portfolio, aligning it with a major international player in graphite electrodes, with GrafTech currently valued at $416.61 million.

GrafTech International’s Industry Role

GrafTech’s market leadership in graphite electrode production GrafTech International is recognized as a leading global manufacturer of high-quality graphite electrodes, integral to the production of steel and other metals. The company operates ultra-high power graphite electrode manufacturing facilities with high capacity, allowing it to maintain a competitive edge in the global market. This makes the stake acquisition by HEG particularly significant given both companies’ alignment in this specialized sector.
Global footprint and strategic importance
GrafTech’s operations span across multiple countries, reflecting its robust international presence. The company’s strategic position as a low-cost producer in the graphite electrode market strengthens HEG's investment prospects and potential synergies.

HEG’s Broader Corporate Strategy

Demerger of HEG’s graphite business Earlier in May, HEG Ltd approved a major corporate restructuring plan aimed at unlocking shareholder value. The company announced the demerger of its graphite business into a new entity, marking a shift towards diversifying its operations and focusing on future growth sectors. The demerger will enable the graphite business to be listed as a separate entity by 2025.
Merger with Bhilwara Energy
Concurrently, HEG is merging with Bhilwara Energy, a significant player in the hydro and wind energy space. This merger is part of HEG's broader ambition to pivot toward green energy solutions, leveraging its existing platform to explore advanced carbon and other new-age business opportunities.

Financial Implications and Shareholder Impact

Share swap ratios and stock market listing The demerger will be accompanied by a share swap ratio of 1:1, offering shareholders equal stakes in the newly created graphite-focused entity. For the merger, HEG has announced that shareholders will receive 8 fully paid-up equity shares in the new company for every 35 shares held in the transferor company. The resulting companies will be listed on both the BSE and NSE, offering enhanced liquidity and visibility to investors.
2025 listing of graphite business
With the completion of the demerger scheduled for 2025, HEG’s graphite business will emerge as a standalone entity. This move is expected to unlock significant value for HEG’s shareholders by creating focused businesses in both the graphite and green energy sectors, capitalizing on emerging industry trends and opportunities.