HEG's Three-Company Play: What the NCLT Scheme Means for Shareholders

HEG Limited has just received NCLT sanction for a composite scheme of arrangement — one of the most complex capital structures in Indian equities. The scheme does three things simultaneously: it demerges HEG's graphite undertaking into a new public company called HEG Graphite Limited, it amalgamates Bhilwara Energy Limited into the residual HEG, and it reshuffles shareholding ratios across all three entities. The record date is September 7, 2026. This is not a rumor or proposal — the NCLT (Indore bench) sanctioned it on August 24, and the company has already notified management changes effective from September 1.

1. 1

   Scheme sanctioned by NCLT

   Aug 24, 2026

   National Company Law Tribunal (Indore Bench) approved the Composite Scheme of Arrangement on August 24, 2026. The scheme is now legally final; appeals are not mentioned.

2. 2

   Scheme becomes effective

   Sept 1, 2026

   The scheme takes effect on September 1, 2026. All shareholding and management changes, including the appointment of new key managerial personnel and directors across all three entities, become operative on this date.

3. 3

   Record date for shareholder determination

   Sept 7, 2026

   September 7, 2026. Shareholders holding HEG shares on this date are eligible to receive shares in HEG Graphite Limited and retain their holding in the merged HEG entity. Shares will be credited to demat accounts within the exchange-stipulated timeline.

4. 4

   Stock exchange approvals and listing

   Est. Oct–Nov 2026

   HEG Graphite Limited will be listed on BSE and NSE, likely within 4–6 weeks post-record date. Market will price the new entity on independent fundamentals — graphite commodity cycle, margins, and any new projects HEG Graphite may have.

The 1:1 ratio for HEG Graphite is straightforward — every HEG share becomes two positions (one in HEG Graphite, one in merged HEG). The 8:7 ratio for Bhilwara shareholders is a premium to Bhilwara's standalone price, reflecting the value of merging into HEG's platform and accessing its balance sheet. In effect, HEG shareholders are not diluted by Bhilwara's amalgamation; they retain their original stake in the merged entity plus gain a stake in the demerged graphite business.

Why this unlocks value: The demerger separates HEG's graphite business — electrodes and refractories, a cyclical but margin-rich business tied to steel and aluminum demand — from other industrial holdings. Graphite as a standalone entity can pursue a focused capital allocation strategy: reinvest in capacity (the graphite market is tight globally) or return cash to shareholders. By demerging, HEG Graphite avoids the valuation discount that conglomerates trade at — investors can buy "pure play" graphite exposure without paying for unrelated assets. The residual HEG + Bhilwara combination becomes a diversified industrial platform, potentially a dividend/buyback player if management chooses capital return. Bhilwara shareholders get a premium entry (8:7 ratio) into a larger, better-capitalized entity. Everyone wins from clarity: separate valuations, separate strategies, no conglomerate discount.

HEG's financials show a dramatic Q4 FY26 loss (−₹163 Cr net profit on ₹603 Cr revenue), followed by a sharp recovery in Q1 FY27 (₹109.5 Cr profit on ₹681 Cr revenue). This V-shaped recovery — on normalized margins of 24% OPM in Q1 — suggests that Q4's loss was either a one-time charge (restructuring for the scheme, asset write-down, or tax adjustment) or a cyclical trough in the graphite/refractories market. The demerger's timing, happening as HEG's core business is on an upswing, is tactically favorable: graphite shareholders get a business trading off a recovery, not a distress point.

HEG is trading near its 52-week high, above all key moving averages, with RSI in neutral zone (64). The bullish technicals suggest the market is pricing in a recovery story, not a distressed corporate action. The scheme becomes effective just as the stock is in a strong uptrend — a positive signal for investors who receive new shares in HEG Graphite at a time when the parent entity is performing well.