Crompton Greaves’ consumer electrical business will be sold to Advent International Corp and Singapore’s Temasek Holdings for ₹2,000 crore. Avantha Holdings, promoter of Crompton Greaves, said that Crompton Greaves Consumer Electricals Ltd (CGCEL) will be demerged into a standalone company and listed on the stock exchanges.

Advent, a global private equity firm, and Temasek will make an open offer for additional shares. The company had earned revenue of ₹2,850 crore for the fiscal ended March 2014.

CGCEL manufactures and markets a wide array of consumer products, ranging from fans and lamps to household appliances such as water heaters, mixer grinders and toasters. It employs around 3,500 people and has six manufacturing facilities.

Gautam Thapar, Founder and Chairman of the Avantha Group, said, “Both Advent and Temasek have extensive financial, sector and operational expertise, and we believe they are well-positioned to support CGCEL in its next phase of growth.”

On the BSE, the shares of Crompton Greaves slid 2.5 per cent to ₹164.20 apiece on Friday.

Analysts said that the deal value was 10-12 per cent lower than the market estimate. “While the deal valuation comes as a disappointment, there is room for a potential re-rating in value for the consumer business post-listing as peer Havells India is trading at a sharp premium.

“The acquirer may also announce an open offer to minority shareholders of the consumer business on listing,” said Kunal Sheth, Research Analyst-Institutional Equities, Prabhudas Lilladher.

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