HEG Targets Rs 3,500 Crore Project Implementation Post Demerger Of Graphite Business

HEG Ltd. targets project implementation worth Rs 3,000 to Rs 3,500 crore in both existing and new projects, including those in the green energy space, the company’s Vice Chairman Riju Jhunjhunwala said on March 13. This roadmap follows the company’s demerger, which will result in two distinct business segments: HEG Ltd., focusing solely on graphite electrodes for electric arc furnaces, and HEG Greentech Ltd., the green energy arm.

"We have Rs 750 crore in cash in HEG, which will be used for existing projects. Bhilwara Energy has Rs 300 crore for equity funding, and Rs 125 crore in Ebitda comes in annually. Additionally, we are raising Rs 500 crores, which will help us implement projects worth Rs 3,000 to Rs 3,500 crore and explore other aligned opportunities as they arise,” he told NDTV Profit, referring to the recent investment of Rs 250 crore from Singularity AMC, an equity firm backed by ace investor Madhusudan Kela.

Jhunjhunwala explained that the Rs 500 crore being raised will be done in two tranches of Rs 250 crore each. This funding will be utilised to support HEG Greentech's expansion into green energy projects, including energy storage and lithium-ion battery initiatives.

HEG Ltd., part of the LNJ Bhilwara Group, was founded in 1977 and specialises in the manufacturing of graphite electrodes. The valuation for the fundraise in HEG Greentech is approximately Rs 3,600 crore pre-money, he said.

The company has applied to SEBI for clearance regarding the demerger. Jhunjhunwala said that he expected the new entity to be formed by December, with the listing of the new company set to occur by January 2026 at the latest.

Regarding the shareholding pattern, he explained that the demerger will result in a mirror shareholding structure, with HEG shareholders receiving an equivalent share in HEG Greentech Ltd.

"In the new company, the promoters will bring in their 51% share of Bhilwara Energy. Today, the promoters hold 55% in HEG. In the new company, we will own around 70% because we are bringing in 51% of Bhilwara. Once the Rs 500 crore is raised and everything is completed, the promoters will hold 60% equity in the new company, and all other shareholders will have a similar mirror shareholding as HEG,” he said.

He added that the two entities would be distinct focuses, where HEG Graphite will remain the leader in graphite electrode production, while HEG Greentech will concentrate on green energy initiatives. This will include hydropower, energy storage (scaling up to 6GW), lithium-ion anode graphite production, and plastic bottle recycling.

According to Jhunjhunwala, HEG Greentech has Rs 3,000 crore in ongoing projects in Rajasthan and Madhya Pradesh, which are expected to be operational by 2026. By 2028-2029, the company anticipates generating a healthy Ebitda in the four-digit range, he said.

Shares of HEG Ltd. closed at Rs 397.00, down 2.25% on Thursday. In comparison, the benchmark Nifty ended at 22,397.2, down 0.33%.