Crompton Greaves may gain on demerger scheme

Reuters | Updated on January 24, 2018 Published on February 20, 2015

Shares of power equipment maker Crompton Greaves may gain on new scheme of demerger of its consumer business.

Shareholding pattern of the resulting consumer company will mirror that of Crompton Greaves, the company said in a statement.

Crompton had earlier planned to hold 25 per cent stake in the consumer business with 3 years lock-in.

According to analysts, the new scheme is favourable for minority shareholders.

They say that it will remove the worries of holding company discount and opens the possibilities of open offer in the consumer division.

The stock is trading at 23.48x of 1-yr forward earnings vs 31.31 of rivals, says Thomson Reuters Eikon data.

Published on February 20, 2015
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