Siemens Energy India Allots 35.6 Crore Shares Post Demerger

Siemens Ltd, Siemens AG's Indian subsidiary, has decided to demerge its energy business into an independent company called Siemens Energy India Limited. This step is meant to allow the two companies to concentrate on core business and explore different growth initiatives. According to the demerger proposal, shareholders of Siemens Ltd will be entitled to receive one share in Siemens Energy India for every share held in Siemens Ltd. The new company will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) when regulatory approvals are completed, within 2025.

Siemens Energy India will focus on offering solutions along the complete energy value chain, including power and heat generation, transmission, and storage. Its portfolio will include conventional and renewable energy technologies, such as gas and steam turbines, hybrid power plants run on hydrogen, and power generators and transformers. This restructuring is due to the varying market dynamics and capital allocation needs between the industrial and energy businesses.

The demerger is a part of an international trend started by Siemens AG in 2020 when it demerged its energy business. In anticipation of the Indian demerger, Siemens AG purchased an 18 percent stake in Siemens Ltd from Siemens Energy for about €2.1 billion, raising its shareholding to 69 percent and lowering Siemens Energy's holding to 6 percent. The remaining 25 percent belongs to public shareholders.

Siemens Ltd will remain a technology-driven company in industry, infrastructure, and mobility businesses. The demerger is intended to release shareholder value by enabling each business to pursue its particular strategies and exploit opportunities in its market. Separation is forecasted to increase the efficiency of decision-making, specifically with respect to capital deployment, and better position both firms to meet the changing needs of their industries.