Crompton Greaves' shares today ended nearly 3 per cent lower after Avantha Group announced selling its entire holding of 34.37 per cent in demerged consumer products business of the company to private equity investors Advent International and Temasek for Rs 2,000 crore.
After falling 7.77 per cent to Rs 155.40 in intra-day trade on the BSE, shares of Crompton Greaves recovered some of the lost ground and finally ended at Rs 164.20, down 2.55 per cent from its previous close.
On the NSE, the stock settled 2.61 per cent lower at Rs 164.15.
On the volume front, 7.69 lakh shares of the company changed hands on the BSE and over 57 lakh shares were traded on the NSE during the day.
"While the initial deal amount seems to be on lower side, more clarity on demerger (how much debt, transferred, any one time royalty etc) will help give more accurate view on valuation," said Kunal Sheth, Research Analyst-Institutional Equities Prabhudas Lilladher.
The two private equity firms will then make an open offer for additional shares to gain ownership of the consumer unit of Avantha Group -- Crompton Greaves Consumer Electricals (CGCEL) -- which will be listed on the National Stock Exchange and the BSE.
The deal values CGCEL at an enterprise value of Rs 6,600 crore.
In February this year, Crompton Greaves' Board had approved full demerger of its consumer products business, saying that shareholding of CGCEL, upon completion of the demerger, will mirror the shareholding of Crompton Greaves.
Under the terms of agreement, CGCEL will be demerged from CG into a standalone company and will consequently be listed on the NSE and BSE.
In the stock market, the BSE benchmark Sensex ended at 27,437.94, down 297.08 points.
