BENGALURU (Reuters) – Indian conglomerate Siemens Ltd. said on Tuesday it would spin off its energy business into a separate, listed company to focus on core businesses that meet the demands of shareholders of German parent Siemens AG.
Siemens Ltd had announced in December 2023 that it was considering a spin-off of its energy business at the behest of some of its shareholders. To facilitate the spin-off, Siemens Energy sold an 18 percent stake in the Indian company to Siemens AG for around 2.1 billion euros.
The German mechanical engineering group spun off Siemens Energy in 2020 and took it public.
After the spin-off, Siemens Ltd. will continue to focus on technology-led development in the infrastructure and industrial sectors, while the power generation businesses, including renewable energy, will come under Siemens Energy India.
Shareholders of Siemens Ltd. will receive one share of Siemens Energy India for each share held, the company said.
“The underlying market drivers and capital allocation requirements are fundamentally different in the energy business than in the industrial business,” said CEO and Managing Director Sunil Mathur.
The spin-off will enable both companies to pursue their respective strategies and make capital allocation decisions, Mathur added.
The plans for the spin-off come at a time when India expects its power generation to grow at its highest rate since at least 2011-2012 in fiscal 2025. Siemens AG is eyeing future investments in the country, which is currently undergoing increased grid upgrades and electrification programs.
Siemens’ Indian arm also announced the expansion of two of its 32 factories in the country. The capacity will be increased at two factories in the western Indian state of Goa, bringing the total investment cost to 10 billion rupees (around $120 million).
Siemens Ltd. also reported a 70 percent increase in profit in the second quarter. This increase was due to growth in the energy and smart infrastructure businesses, which accounted for about 50 percent of total pretax profit.
(1 US dollar = 83.4984 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Eileen Soreng)
