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Leading global private equity (PE) companies such as US-based Capital International Private Equity and Singapore's sovereign fund Temasek are keen to acquire a minority stake in Crompton Greaves Consumer Products - the proposed de-merged consumer business division of Avantha Group - sources said.
On Monday, Crompton Greaves, part of Gautam Thapar-promoted Avantha had said Avantha Holdings would sell a part of its 42.7 per cent stake in Crompton Greaves Consumer Products. Avantha Holdings directly owns 40.84 per cent stake with the rest held by other investment entities.
Capital International has exposure to India through its investments in L&T Financial Holdings, Deccan Aviation, Manipal Global Education Services, Multi Screen Media (MSM) and MindTree.
Capital International had picked up an eight per cent stake in MSM for $200 million in 2010. In 2011, it invested Rs 330 crore in L&T Finance Holdings, Larsen & Toubro's financial services holding company and in 2012, it closed an emerging markets fund at $3 billion. Capital International has been investing in emerging markets since 1992.
Last month, The Crompton Greaves board approved de-merger of its consumer products business into a separate listed firm, Crompton Greaves Consumer Products. On completion of the de-merger, Crompton Greaves will hold 25 per cent stake in the consumer products company, while Avantha will own 32 per cent and the rest will be held by other investors. Analysts are valuing the firm's consumer products business at Rs 5,500-6,500 crore based on their 2015-16 earnings estimate.
Crompton Greaves operates three business groups - power systems, industrial systems and consumer products. Under the consumer product business, it manufactures products ranging from fans, lights, pumps and household appliances.
An Avantha Group spokesperson said, "The Avantha Group does not comment on market speculations."
A Temasek spokesperson also responded on similar lines, saying: "Temasek, as a matter of policy, does not comment on market speculation or rumours."
An email questionnaire sent to Capital International did not elicit any response.
PE majors already have exposure to leading electrical goods manufacturing company Havells India as well. Nalanda India Equity Fund is holding 5.2 per cent in Havells. Last year, US-based PE major Warburg Pincus had sold its entire 8.35 per cent stake in Havells India to emerging market fund Vontobel for Rs 730 crore.
