Crompton Greaves' shares tanks 70% on demerger

Shareholders will receive equity in the resultant company, Crompton Greaves Consumer Electricals, in 1:1 ratio

Shares of Crompton Greaves tanked by over 70% as the company de-merged its consumer business from Tuesday. The prices reflect the market value for the firm's power business alone.

The consumer unit is to be listed as a separate company next month.

The shares of Crompton fell Rs 110.20, or 71.10% at Rs.44.80. The scrip has seen a 52-week high of Rs 203.50. Post de-merger, shareholders of Crompton Greaves will receive equity in the resultant company, Crompton Greaves Consumer Electricals, in the ratio of 1:1.

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The transaction needs the approval of the Bombay High Court.

The company on March 9 had said it will sell its power business overseas to a US private equity fund for an enterprise value of 115 million euros. It included its European, North American and Indonesian power transmission businesses to First Reserve International.