Siemens India is set to embark on an exciting new chapter as it gears up for the demerger of its energy division. With the record date set for April 7, shareholders can expect to receive one share of Siemens Energy India for every share of Siemens India they hold. This strategic move will pave the way for Siemens Energy India to make its debut on the stock exchanges, potentially within 30 to 90 days following the record date.
What to Expect on April 7
On April 7, Siemens India will issue shares of Siemens Energy India to its existing shareholders. Notably, April 4 will mark the last trading day for Siemens India’s energy segment. A special pre-opening session on April 7 will establish a fixed price for the new Siemens Energy India shares, which will then be deducted from the share price of Siemens India. This fixed price will be calculated by taking the difference between the closing price of Siemens India on April 4 and the price determined during the special session.
- Record Date: April 7
- Last Trading Day: April 4
- Price Calculation: Difference between closing price (April 4) and pre-open price (April 7)
Following the listing, passive fund managers will ensure that Siemens Energy India is included in all major NSE and BSE indices for the three days post-listing.
Anticipated Listing Timeline
According to IIFL Securities, the listing process for Siemens Energy India could span 60 to 90 days from the record date, aligning with Siemens AG’s forecast for June 2025. However, Nuvama believes a quicker timeline of about 30 days is possible, given Siemens India’s significant market presence. Recent similar demergers, such as those by ITC Hotels Ltd. and Jio Financial Services Ltd., achieved listings in as little as 23 to 33 days.
Siemens Energy India: Core Operations
Siemens India’s energy sector is dedicated to delivering comprehensive solutions across the energy value chain. The company specializes in:
- Grid Technologies
- Industrial Power Generation
- Gas Services
- Project Execution in Generation and Transmission
Historically, this division has been a substantial contributor to Siemens India’s overall revenue, accounting for roughly 35% to 40% of total earnings between FY21 and FY24.
Strong Order Book and Financial Performance
As of the December 2024 quarter, Siemens Energy India reported an impressive order book of ₹10,050 crore for FY24. In addition, the company secured new orders amounting to ₹8,800 crore during the fiscal period.
- Revenue (FY24): ₹6,280 crore
- EBITDA Margins: Approximately 15.7%
- Net Profit: ₹710 crore
Future Growth Projections
IIFL Securities anticipates a remarkable 24% compounded annual growth rate in energy revenues from FY24 to FY27, spurred by a global increase in transmission investments. The favorable pricing environment is also expected to enhance operating profit margins, potentially reaching 18% in FY25.
Jefferies views Siemens Energy India as a key player in the ₹9.2 lakh crore transmission capital expenditure pipeline, predicting a two-fold increase in earnings per share (EPS) over the next few years.
Price Expectations and Valuations
Market analysts suggest a price range of ₹1,650 to ₹2,000 for Siemens Energy India shares. The base case price target is set at ₹3,375, which translates to a price-to-earnings ratio of 45 times. Jefferies, on the other hand, estimates Siemens Energy India’s valuation at 62 times its FY27 earnings, indicating a 13% discount compared to Hitachi Energy. Their implied target stands at ₹3,743, suggesting a 32% upside from the initial listing price.
As the demerger approaches, investors and stakeholders alike are keenly watching how Siemens Energy India will reshape the landscape of India’s energy sector.
