Siemens Soars: Shares Surge 9% as Company Unveils Ambitious Energy Business plan
Siemens AG plans to acquire an 18% stake in its Indian joint venture from Siemens Energy AG for ₹18,968 crore.
Shares of Siemens Ltd soared by 9% and achieved an all-time high today following the company’s announcement of the potential demerger of its energy business. The Board of Directors, in a meeting held on December 18, 2023, granted authorization to the company’s management to initiate exploratory measures necessary for assessing the feasibility of the proposed demerger.
Siemens Aktiengesellschaft, Germany, Siemens International Holding B.V., and Siemens Energy Holding B.V., along with Siemens Energy Aktiengesellschaft, the ultimate parent company of Siemens Energy Holding B.V., have individually urged the Siemens Ltd board to deliberate, evaluate, and initiate the process of separating the energy business into a distinct entity.
Furthermore, on December 11, 2023, Siemens Energy Holding B.V., formerly known as Siemens Gas and Power Holding B.V., divested 6.4 crore equity shares, representing an 18% stake, to Siemens Aktiengesellschaft, Germany. Siemens Energy Holco B.V., another promoter, also expressed interest in acquiring 1.7 crore shares, equivalent to a 5% stake in Siemens Ltd. Additionally, Siemens Aktiengesellschaft, Germany, proposed to acquire 6.4 crore shares, constituting an 18% stake, from another promoter, Siemens Energy Holding.
In response to this development, Siemens India shares opened with a gap up at ₹3,915.40 on the BSE, reaching an intra-day high of ₹4,244.55. This surge elevated the company’s market capitalization to ₹1.47 lakh crore. As of the current share price of ₹4,133, the company’s stock is trading 2.6% lower than the one-year high of ₹4,244.55 attained today. Over the past week, month, and six-month periods, Siemens Ltd’s share price has experienced gains of 6.38%, 14.76%, and 8.08%, respectively. In the year-to-date and one-year periods, shares have surged by 45.51% and 39.29%, respectively.
On November 15, 2023, Siemens AG revealed its intention to acquire an 18% stake in its India joint venture from Siemens Energy AG, with the proposed acquisition valued at ₹18,968 crore. It is worth noting that when Siemens Energy AG was established in 2020, Siemens India Ltd had not undergone unbundling due to administrative reasons. Presently, Siemens Energy holds a 24% stake in Siemens Ltd, India, while Siemens AG holds 51%. The announcement specified that this partial sale marks the initial phase of the planned, and now expedited, unbundling process of Siemens Energy and Siemens AG in India, set in motion in November 2023. Importantly, Siemens Energy affirmed that this partial sale would not adversely impact its operations in India.
Siemens Energy’s diverse portfolio in India encompasses cutting-edge compressors, turbines, generators, virtual power plants, intelligent grid management, and innovative storage solutions. The company actively engages in various sectors such as power generation, renewable energy, services, industrial applications, storage solutions, and services for power transmission.
Siemens (SIEM.NS) Achieves Record Highs as Energy Business Demerger Plans Drive Shares Up 6.7%
- Siemens experienced a remarkable surge, with its shares climbing as much as 6.7% to an all-time high of 4,170 rupees.
- The company announces plans to investigate the potential demerger of its energy business.
- Today marks the stock’s most impressive performance in 2023.
- Closing last Friday with seven consecutive weeks of gains, the stock continues its upward trajectory showcasing upliftment.
- Trading activity is robust, with over 700,000 shares exchanged by 1:30 pm IST, surpassing the 30-day average by 2.2 times.
- The consensus among 18 analysts covering the stock leans towards a “buy” rating. The median price target is 4,120 rupees, representing a marginal 0.5% dip from its current valuation.
- With today’s gains factored in, the stock has soared approximately 47% year-to-date.
