HEG Limited announces its proposed demerger to unlock value, creating HEG Graphite and HEG Greentech. HEG Greentech will focus on renewable energy and battery storage, including advanced battery materials. A new anode manufacturing facility is being established. Hydroelectric plants continue to generate steady cash flow. The graphite electrode business remains strong with capacity expansion planned.
Demerger and Value Unlocking
HEG Limited has proposed a demerger to unlock value for shareholders, creating two focused companies: HEG Graphite Limited and HEG Greentech Limited. Shareholders will directly own shares in both companies.
HEG Greentech: Renewable and Energy Storage
HEG Greentech will operate across four synergistic pillars:
- Advanced Battery Materials (20,000 tonnes per annum active anode material facility).
- RE Power Generation, Solar and BESS.
- Renewable Energy IPP. Accumulative BESS capacity of over 250 GWh is projected.
- Hydroelectric Plants: generating steady cash flows of approximately ₹300 crore plus annually.
Advanced Battery Materials: Anode Project
A 20,000 tonnes per annum synthetic graphite anode material manufacturing facility is being established with a potential expansion to 60 kTPA by FY32. A 200-tonne pilot plant has been set up, and materials have been sent to global cell OEMs for testing.
REPlus: Battery Energy Solutions
REPlus has commissioned 100 MWh+ capacity and has over 2,000 MWh capacity under execution. They are targeting ₹6000 crores in revenue with the ultimate capacity. REPlus is creating smart battery and grid management solutions.
Financial Projections and Capital Expenditure
The company intends to deploy almost ₹4300 crores in capital, primarily for anode material and RE power generation, with a total capex of ₹7700 crores by the end of FY27. The target equity IRR is between 16% to 20%.
Graphite Electrode Business Outlook
HEG remains the 3rd largest graphite company in the world. The company is seeing increasing demand for graphite electrodes, particularly from electric arc furnaces in the Western world. They forecast a demand of about 200,000 tons.
Financial Performance of Hydroelectric Plants
Hydroelectric projects deliver almost ₹370 crore EBITDA and a free cash flow of ₹300 crore plus. These assets generate electricity during peak hours, leading to additional revenue.
Source: BSE
