The Indian arm of this German multinational technology conglomerate has seen a significant 78% increase in its shares over the past 6 months and has initiated plans to separate its energy business into a distinct entity.
On Tuesday, at 1:25 p.m., Siemens Ltd shares were trading at ₹6,930 a share, up 1.00 percent from the previous close price, the company has a market capitalization of ₹2,46,791 crores.
Siemens Limited offers products, integrated solutions for industrial applications for manufacturing industries, drives for process industries, intelligent infrastructure and buildings, efficient and clean power generation from fossil fuels and oil & gas applications, transmission and distribution of electrical energy for passenger and freight transportation.
In May 2024, Siemens Limited’s board approved the demerger of its energy business into a distinct entity, Siemens Energy India Limited, which will subsequently be listed on both the BSE and NSE.
Shareholders will receive one share in Siemens Energy India Limited for every share held in Siemens Ltd, i.e. in the ratio of 1:1.
After the demerger, Energy India’s ownership pattern will replicate that of its parent company, with Siemens AG retaining 69%, Siemens Energy holding 6%, and the remainder being held by the public.
After Demerger, Siemens Ltd will emphasize more on technology-driven progress in infrastructure and industry sectors, while Siemens Energy India will be responsible for overseeing power generation, including renewable energy.
In December 2023, Siemens Ltd announced its exploration of a spin-off for its energy business following the request of certain stakeholders. As part of this initiative, Siemens Energy AG divested an 18% stake in the Indian entity to Siemens AG for approximately 2.1 billion euros, facilitating the demerger process.
According to a Reuters report, Siemens’ India arm is set to expand two of its 32 factories in the country, with capacity enhancements planned for two facilities located in the western Indian state of Goa. This expansion will result in a total capital expenditure investment of 10 billion rupees (around $120 million).
Sunil Mathur, the managing director and CEO of Siemens Limited, commented that the demerger will enable both entities to pursue their specific strategies, concentrate on their core portfolios, and make decisions regarding capital allocation independently.
The completion of the process, which involves obtaining necessary approvals and subsequently listing Siemens Energy India, is anticipated by 2025.
Currently, Siemens’ energy business constitutes 33 percent of Siemens Limited’s overall operations, with a focus on gas turbines and power transformers, products experiencing high demand both domestically and internationally.
During the period from Q4 FY23 to Q4 FY24, the company witnessed a notable 19% revenue upswing, soaring from ₹4,465 crores to ₹5,314 crores. Concurrently, net profit surged impressively by 72.6%, escalating from ₹516 crore to ₹896 crore.
Siemens Ltd’s shares have experienced a 78% increase over the past six months and an 89% increase over the past twelve months.
As of March’s shareholding pattern, the company’s promoter holds a 75% stake, Foreign Institutional Investors (FIIs) hold 8.30% and Domestic Institutional Investors (DIIs) hold 7.42%.
Written by Omkar Chitnis
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