"Siemens Ltd Announces Formation of Subsidiary for Energy Business Operations"

Siemens Ltd has initiated the preliminary stages of demerging its energy business, securing board approval for the establishment of a wholly-owned subsidiary dedicated to this purpose. In a recent meeting, the board of directors granted authorization for the management to commence exploratory steps necessary for examining the potential demerger of the company's energy business, as disclosed in an exchange filing.

The board's approval includes the immediate incorporation of a wholly-owned subsidiary in Mumbai, anticipating its potential requirement in the event the board decides to implement the aforementioned demerger. This strategic move follows a request from Siemens AG and Siemens Energy, the company's promoters, to evaluate and initiate exploratory steps toward a potential demerger of the energy business into a separate entity.

Siemens Ltd's shares experienced a notable uptick of over 5 per cent, reaching Rs. 4,119.95 on the NSE during afternoon trades. The stock has appreciated by over 15 per cent over the past 30 days.

In November, Siemens AG announced its intention to propose the merger, with Siemens Energy acquiring a majority stake in the demerged entity. The demerger is projected to be completed by 2025.

This restructuring aligns with Siemens Group's broader plan to separate Siemens Energy and Siemens AG in India. Notably, in 2020, when Siemens Energy was established following a restructuring of the Siemens Group, the Indian subsidiary remained unseparated for administrative reasons. In the fiscal year ending September 2022, Siemens India's energy business reported a revenue of Rs 5,371 crore, contributing 32.6 per cent to the total revenues.

As part of the ongoing restructuring, Siemens AG recently acquired an additional 18 per cent stake in the Indian subsidiary from Siemens Energy. The transaction, disclosed in an exchange filing, involved the parent company acquiring 6.4 crore shares for Rs 18,677.5 crore, resulting in Siemens AG's stake in Siemens Ltd reaching 69 per cent.

HBL