CG Power: Investors should keep an eye on progress in deal completion

A strong partner should help business growth; further gains hinge on pricing, deal completion

The news of Tube Investments of India (TII) acquiring a controlling stake in CG Power boosted sentiment. CG Power has gained 30 per cent, while TII shares are up over 16 per cent since the announcement, with the Street viewing it as a win-win deal. CG Power gets a stronger parent, while TII gets a larger business and growth opportunity, albeit with its share of risk.

CG Power, which provides power and industrial system-related services, has struggled largely with stress in its European operations.

While the company restructured and divested part of its European business, it was not able to find suitable