Siemens Limited Announces Spin-Off Launches Siemens Energy India
Siemens Limited's board has given the green light to a plan to separate its energy business into a new legal entity called Siemens Energy India Limited. This entity will operate as a wholly-owned subsidiary of Siemens. Following necessary approvals, Siemens Energy India Limited will be listed on the market and its shareholding will replicate that of Siemens.
The multinational conglomerate states that the demerger will result in the establishment of two robust and autonomous entities, enabling them to effectively cater to their specific markets and customers with enhanced focus. Additionally, the demerger aims to maximize shareholder value for both businesses.
According to the company, Siemens will maintain its focus as a technology-driven entity in industry, infrastructure, and mobility. Meanwhile, Siemens Energy India will prioritize becoming the premier energy technology company dedicated to assisting its customers in transitioning towards a more sustainable global landscape.
Siemens Energy India will offer comprehensive solutions spanning the entire energy value chain. This includes power and heat generation, transmission, and storage, facilitated by a diverse portfolio encompassing both conventional and renewable energy technologies. These technologies range from gas and steam turbines to hybrid power plants utilizing hydrogen, as well as power generators and transformers.
According to the arrangement scheme, Siemens shareholders will be allocated one share of Siemens Energy India for each share of Siemens they hold. Following this, the new entity will be listed on both the BSE Limited and the National Stock Exchange of India Limited.
“Siemens Energy India Limited and Siemens Limited will script new paths as two independent, publicly-listed companies. The underlying market drivers and capital allocation requirements are fundamentally different in the energy business compared to the industrial business. The demerger will enable both companies to pursue their specific strategies, focus on their core portfolios and take decisions on capital allocation. This will enable the full value of each of the businesses to be unlocked for the benefit of the shareholders”, says Sunil Mathur, Managing Director and Chief Executive Officer, Siemens.
Siemens recorded a 74% increase in profit for the March quarter, reaching Rs 896 crore, driven by elevated revenues. Revenue for the quarter reached Rs 5,248 crore, marking a 19% surge compared to Rs 4,400 crore in the March quarter of 2023. Following its financial year from October to September, the company secured new orders amounting to Rs 5,184 crore.
“The second quarter of Fiscal Year 2024 showed a robust growth in Revenues built off a strong order backlog. Some large orders have been deferred. There has also been a slowdown in ordering of industrial automation products due to normalisation of demand following shorter delivery cycles”, says Mathur.
Siemens has unveiled plans to expand two out of its 32 factories located in India. This expansion initiative supplements the capacity expansions previously announced for the Power Transformer factory in Kalwa and the Vacuum Interrupter factory in Goa in November 2023. As a result, the total capital expenditure investment is anticipated to surpass Rs 1,000 crore.