Siemens Energy Business Demerger, Shareholders To Get 1:1 Shares

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Synopsis:

Siemens Limited plans to demerge its energy business, forming Siemens Energy India Limited, listed on Indian stock exchanges. Shareholders will receive shares in 1:1 proportion. In FY23, the energy segment generated ₹59,869 crore in revenue, a third of the total.

Siemens News Today

Siemens Limited obtained board approval to demerge its energy business into a separate entity, Siemens Energy India Limited, listed on BSE and NSE. Shareholders will receive one share in the new entity for every share in Siemens Ltd.

The shareholding of Siemens Energy India will reflect that of the parent entity, with Siemens AG holding 69%, Siemens Energy (a global entity) 6%, and the rest with the public.

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Rationale and Strategy

The demerger aligns with a global strategy initiated in 2020 by Siemens AG. It aims to allow both entities to focus on core activities, portfolios, and capital allocation independently.

Siemens Ltd will continue as a technology-focused company in industry, infrastructure, and mobility, while Siemens Energy India will specialise in energy technology to support sustainable practices.

Market Outlook and Growth Projections

Sunil Mathur, MD & CEO of Siemens Ltd, anticipates significant growth in the energy market, estimated to expand at 9% annually till 2030. Government infrastructure spending and renewable energy initiatives are expected to drive this growth.

Capex and Expansion Plans

The board also approved an investment of ₹519 crore to expand capacities at a switchgear factory in Goa and a metro train manufacturing unit in Aurangabad. These expansions are slated for completion by FY27 and FY28, respectively.

Financial Performance

In the March quarter, Siemens Ltd reported a 74% rise in net profit to ₹896 crore, with revenue increasing by 19% to ₹5,248 crore. New orders amounted to ₹5,184 crore in the same period, despite some order deferrals and industrial slowdowns.

Sources:

https://www.thehindubusinessline.com/companies/siemens-ltd-spins-off-energy-business-shareholders-to-get-one-share-for-every-share-held/article68175275.ece

https://www.moneycontrol.com/news/business/companies/siemens-india-board-approves-demerger-of-its-energy-arm-into-separate-listed-entity-12721975.html

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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