Crompton to buy 41% in Avantha Power

Electrical equipment maker Crompton Greaves today said it will acquire a 41 per cent stake in Avantha Power & Infrastructure for Rs 227 crore.

Besides, the company said it will buy back shares to the extent of Rs 224 crore, at a price for up to Rs 170 a piece.

In a filing to the Bombay Stock Exchange Crompton Greaves said it would invest Rs 227 crore in shares of Avantha Power, at about Rs 11 a piece, constituting 41 per cent stake in the company.

"The company views the power generation, transmission and distributing business as a strategic opportunity for its future growth and would like to expand its presence in this arena," the filing added.

Besides, the board at their meeting had approved the buying back of shares at a price not exceeding Rs 170 per share, up to an amount of Rs 224.15 crore, which is 25 per cent of the total paid-up capital and free reserves.

The board has declared an interim dividend of 25 per cent at the rate of Rs 0.50 per share, it said.

Shares of Crompton Greaves were trading at Rs 127.50, down 5.73 per cent on the BSE.