Shares of Crompton Greaves surged over 13 per cent today after its Board proposed to demerge its consumer products business unit into a separate listed entity.
The scrip of Crompton ended at Rs 210.85, up 13.45 per cent on the BSE. In intra-day, the stock zoomed 16.59 per cent to Rs 216.70.
At the NSE, the company's scrip soared 13.26 per cent to settle at Rs 210.60.
In terms of volume, 33.03 lakh shares of the company changed hands at the BSE, while over 2 crore shares were traded at the NSE during the day.
"The Board of Directors held its annual strategic review meeting on July 16, 2014 at Mechelen, Belgium and proposed to demerge its consumer products business unit into a separate listed company," Crompton Greaves said in a filing to the BSE today.
The Board believes that such a demerger will create better growth opportunities for its two large but significantly different businesses - power, industrial and automation which is a B2B business, and the consumer products business which is B2C, it said.
The Board also believes that this will create a more flexible capital structure for the two businesses to grow independently, allow them to pursue more ambitious strategic goals and, thus, create further value for existing shareholders.
The filing further said that the Board has constituted a Committee of Directors to examine all relevant aspects of the process of demerger and listing and make suitable recommendations to the Board.
