Mumbai, Feb. 19: Power equipment maker Crompton Greaves Ltd's board has approved the demerger of its consumer products business, the company said on Thursday.

'(The board) decided to implement a 100 per cent demerger of the consumer products business, such that the shareholding pattern of the resulting consumer company shall mirror the shareholding pattern of Crompton Greaves,' the company said.

The company, majority owned by Avantha Holdings Ltd, had in July last year proposed a demerger of the consumer products business unit, a move that found favour among investors.

Avantha Holdings sold a $139 million stake in Crompton Greaves in November and owned a 34.37 per cent stake at the end of December.

Last year, the company had proposed to issue three equity shares of the new company to Crompton Greaves shareholders for every four shares held by them.

It was expected that after the completion of the demerger, Crompton Greaves would have a 25 per cent stake plus one share, with the remaining stakes being held by its shareholders, which included the promoters.

This plan has now changed. At today's board meeting, the directors evaluated the feedback from Sebi, the bourses and investors and decided to fully demerge its consumer products business.

The board believes that such a demerger will create better growth opportunities for its two large but significantly different businesses - power, industrial and automation, and the consumer products business.

Crompton Greaves shares closed up 2.61 per cent on the BSE on Thursday.