HEG’s stock extended its rally, climbing over 6% on December 5 to reach a 6-year high of ₹619. This marked the third consecutive session of gains for the graphite electrode manufacturer, fueled by a major block deal worth ₹172 crore. During the transaction, 28.8 lakh shares, representing a 6% stake in the company, were traded at an average price of ₹600 per share.
The deal’s floor price was set at a 3% premium to the previous day’s closing price. However, the identities of the buyers and sellers in the transaction remain unknown. By 9:27 am, HEG shares were trading at ₹616.45 on the NSE, reflecting stellar gains of over 40% within the past week.
This stellar performance partly comes as China, a major source of graphite material supplies to the US, has restricted some of those exports recently, part of its attempt to tighten controls over key raw materials amid growing supply shortage fears across the world and benefiting companies such as HEG. The stock had risen more than 16% in the previous session due to these moves.
HEG has also added to its strength by commissioning the major capacity expansion-increasing graphite electrode production to 1,00,000 tonnes, thereby making its plant the largest single-location plant in the western world. The company believes it will help the company get cost efficiency and strengthen competitiveness.
HEG reported a capacity utilisation rate of 80% in the September quarter, the highest in the world. Though global pricing pressures are still continuing, China’s export policies might create better demand opportunities, thereby supporting the long-term growth plans of HEG.
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Source: Moneycontrol
News Desk
