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Crompton Greaves' Board has approved demerger of its consumer products business into a separate listed company, Crompton Greaves Consumer Electricals Ltd (CGCEL), from October 1.
"The Board of Directors of Crompton Greaves has today approved a new Scheme of Arrangement for the vertical demerger of consumer products business into its wholly-owned subsidiary, Crompton Greaves Consumer Electricals, with effect from October 1," Crompton Greaves said in a BSE filing.
CGCEL will apply for listing its shares on the BSE and NSE, it added.
Commenting on the demerger, Crompton Greaves CEO and Managing Director Laurent Demortier said: "The demerger will achieve the objective of creation of two industry leading independent entities and unlocking shareholder value."
He further said: "This is in continuation of our efforts of providing complete independence and flexibility to both entities and help in pursuing aggressive growth."
On February 19, the Board approved proposed demerger and decided to implement a 100% demerger of the consumer products business.
In July 2014, the company's Board proposed to demerge its consumer products business unit into a separate listed entity.
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, the filing 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.
