Crompton Greaves Falls as Company Plans Sale of Consumer Business

Shares of Crompton Greaves fell nearly 8 per cent to day low of Rs 155.40 after the company said that one of its promoters Avantha Holdings is likely to sell its stake in consumer electrical business of the company.

Crompton greaves in a statement to the Bombay Stock Exchange, said, "One of the entities of the promoter group of the company- Avantha Holdings is likely to sell a portion of its shareholding in the company which will house the demerged Consumer business of the company".

A consortium led by US private equity firm Advent International Corp is set to buy the consumer products business of Crompton Greaves for up to Rs 2000 crore, two sources directly involved in the deal told Reuters earlier.

The board of Crompton Greaves, a conglomerate whose activities stretch from power transmission equipment to fans and air coolers, approved a plan in March to hive off its consumer products business into a separately listed company.

Kishor Ostwal, CMD, CNI Research, said that Crompton greaves had run-up a lot in anticipation of this deal and after the news came the traders are booking profits. The valuations of the company still look attractive, he added.

Shares of Crompton Greaves ended 2.5 per cent lower at Rs 164. Trading volumes on the counter surged as 7.7 lakh shares changed hands on the BSE compared to average of 3 lakh shares traded daily in the past two weeks.