Siemens Limited shares surged by 20% on Monday, April 7, 2025, as the company marked the ex-date for its much-anticipated energy business spin-off. The stock opened at Rs 2,571 on the Bombay Stock Exchange (BSE), reflecting a significant adjustment following the demerger.
The demerger, approved by the National Company Law Tribunal (NCLT) on March 26, 2025, allows eligible shareholders to receive one share of Siemens Energy India for every share of Siemens India they hold, in a 1:1 ratio. This corporate action has generated considerable market interest, with many investors eager to understand the implications of the spin-off.
On the last trading day prior to the record date—Friday, April 4, 2025—investors needed to ensure their shares were in their demat accounts to qualify for the new shares. The 'T+1' settlement cycle meant that ownership had to be established by the end of trading on that day.
As the market opened on Monday, shares of Siemens India experienced a dramatic fluctuation. Initially, the stock indicated a 48% fall from its previous close of Rs 4,939.80, signaling a significant adjustment due to the subtraction of the energy business value from the parent company's stock price. Following this dip, the stock dropped further to Rs 2,490, marking a total decline of 50% before rebounding by 20% to Rs 2,998, resulting in an overall gain of 16.6% from the day's low.
Despite the volatility, the total market capitalization of Siemens India remained below the Rs 1 lakh crore mark. The fluctuations in the share price reflect the market's reaction to the separation of the energy business, which has been a focal point for investors.
According to IIFL Securities, the listing process for Siemens Energy India is expected to take between 60 to 90 days from the record date, aligning with Siemens AG's guidance for a June 2025 listing. Another brokerage firm, Nuvama, suggested that the listing might occur even sooner, given the substantial size of Siemens in India.
Siemens has a long history in the Indian market, being involved in various sectors including railways, where it designs, manufactures, and maintains locomotives and rail systems. The spin-off of Siemens Energy India Limited (SEIL) is part of a larger global strategy that Siemens AG initiated nearly five years ago when it spun off its energy business in 2020.
This transition is not just a financial maneuver; it’s also strategic, allowing Siemens to focus on its core operations while enabling the new entity to specialize in energy solutions. The separation is expected to enhance operational efficiency and drive growth for both companies.
Market analysts have varied opinions on Siemens' stock. According to Bloomberg data, of the 25 analysts tracking Siemens, 15 have a 'buy' rating, five recommend a 'hold', and five suggest a 'sell'. The consensus target price for Siemens is Rs 3,058.93, indicating a potential upside of 13.5% from its current levels.
As the dust settles from the spin-off, investors are keenly watching how the newly formed Siemens Energy India will perform in the market. The anticipation surrounding the listing and the operational strategies of both Siemens and its new energy arm will likely dictate investor sentiment in the coming months.
The implications of this demerger extend beyond just stock prices. It represents a significant shift in how Siemens operates in India, allowing for more focused management and potentially more innovative solutions in the energy sector. As the energy landscape continues to evolve, Siemens Energy India is poised to play a crucial role in addressing the growing demand for sustainable energy solutions.
In summary, the spin-off of Siemens Energy India marks a pivotal moment for Siemens Limited, reflecting broader trends in corporate restructuring aimed at enhancing shareholder value and operational efficiency. As the market adjusts to these changes, stakeholders will be closely monitoring the developments in both Siemens India and Siemens Energy India.
