The shares of HEG Limited, an LNJ Bhilwara Group company have lost 42% year to date. HEG is a small-cap graphite electrode producer. It operates one of the largest integrated graphite electrode plants globally and exports more than 70% of its products to over 30 countries worldwide.
On Friday, the stock was trading up by 1.7 per cent at Rs 1,012 levels. This decline in the share price is concurrent with the rising retail participation in the company.
For the quarter that ended in December 2021, the public and FIIs shareholding stood at 23.99% and 13.38% respectively. As per the recent September Q2FY23 shareholding pattern, it had increased to 30.67% while the FIIs stake decreased to 5.58%.
Market commentators are resembling this shift in shareholding to retail investors catching a falling knife as large institutional investors sell out. But it is not only FIIs that are selling their investment in HEG.
Life Insurance Corporation of India has offloaded over 2% equity stake or 7.76 lakh shares in the company through open market transactions. With this, LIC of India’s stake in the graphite electrodes producer has been reduced to 4.84% from 6.85% earlier.
Despite the institutional sell-off and the decline in the stock price, analysts at ICICI Direct see an upside. The brokerage house has given a target price of Rs 1,225 per share. This translates into potential gains of up to 21% for the investors.
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