HEG shares plunge 63% as demerger scheme takes effect

HEG Ltd shares declined 63% during Monday's trading session as the company's demerger plan came into effect, triggering significant restructuring of shareholder holdings. The sharp fall reflects the mechanical adjustment required as the company separates into two distinct entities through the sanctioned demerger scheme.

As per the terms of the demerger arrangement, HEG shareholders will receive one equity share with a face value of ₹2 in the newly created company for each existing HEG share of identical face value held as of the record date. The share issuance is structured on a one-to-one basis, ensuring proportional retention of ownership stakes across both resulting entities.

Demergers typically result in short-term share price volatility as markets reprrice the constituent companies independently. The 63% decline reflects the market's initial valuation of HEG's continuing operations post-demerger, while the newly created entity begins separate trading. Investors are advised to monitor both entities' performances as they establish independent market positions.

The demerger scheme had been previously approved by the company's shareholders and regulatory authorities. Both resulting companies are expected to focus on their respective business segments, potentially unlocking value as separate, specialized entities.