Siemens India Demerger: Stock Price Increased After NCLT Approved Energy Business Demerger

Siemens India has recently made headlines after the National Company Law Tribunal (NCLT) approved the demerger of its energy business, leading to a significant surge in its stock price. This article explores the implications of this move, the details surrounding the demerger, and what investors need to know.

Overview of Siemens India’s Demerger

On March 26, 2025, Siemens India shares experienced a remarkable increase of approximately 5% following NCLT’s approval for the demerger of Siemens Energy India Limited (SEIL) from Siemens Ltd. The appointed date for this demerger is March 1, 2025, and it officially takes effect from March 25, 2025. 

Shareholders will receive one equity share of Siemens Energy India for every share they hold in Siemens Ltd. as of the record date set for April 7, 2025.

Purpose of the Demerger

The primary objective behind this strategic move is to enhance operational focus and unlock shareholder value. By separating its energy business, Siemens aims to allow both entities—Siemens Ltd. and Siemens Energy India—to concentrate on their respective markets and core competencies. Siemens Ltd. will continue to focus on automation, digital industries, smart infrastructure, and mobility, while SEIL will manage energy-related operations.

Market Reaction after the demerger

Following the announcement of the NCLT’s approval, Siemens India’s stock price surged significantly. The shares rose to approximately ₹5,520 during trading on March 26, marking an increase of around 8% at one point in the day. Analysts predict that this demerger could lead to further upside potential for investors as both companies will be better positioned to pursue growth opportunities in their respective sectors.

Currently Siemens Ltd. is trading at ₹5,318.05 at NSE, showing a 13.47% up in the past one month. 

This demerger aligns with Siemens AG’s global strategy initiated in 2020 when it spun off its energy division into a separate entity. By adopting a similar approach in India, Siemens is streamlining its operations to sharpen its focus on key growth areas while ensuring that both entities can operate independently and effectively address their markets.

Key Details About Siemens Energy India

Siemens Energy India is expected to play a crucial role in India’s energy landscape. The new entity will cover the entire energy value chain, offering products and services for power plants, including gas turbines and steam turbines. It will also engage in high-voltage direct current (HVDC) technology and other critical infrastructure projects.

Leadership Structure

Guilherme Vieira De Mendonca, who previously led Siemens’ energy business, has been appointed as the Managing Director and CEO of Siemens Energy India. Harish Shekar will serve as the Executive Director and CFO of the new entity. This leadership team is expected to leverage their expertise to drive growth and innovation within the energy sector.

Implications for Shareholders

The demerger presents several advantages for shareholders:

Increased Clarity: Investors will have clearer insights into the performance and strategies of both Siemens Ltd. and SEIL.

Potential for Value Creation: Analysts believe that separating these businesses could unlock significant value for shareholders as each entity focuses on its core operations.

Proportional Ownership: Shareholders will maintain proportional ownership in both companies post-demerger, ensuring that they benefit from any future growth in either segment.

Future Outlook

Siemens Ltd.’s focus on automation and smart infrastructure aligns well with global trends toward digital transformation. Meanwhile, Siemens Energy India is poised to capitalise on India’s growing energy demands and transition towards sustainable energy solutions.

Conclusion

Siemens India’s recent approval from the NCLT for its energy business demerger marks a significant milestone in its corporate strategy. By creating Siemens Energy India as a standalone entity, Siemens aims to enhance operational efficiency and shareholder value while aligning with global trends initiated by its parent company. As both companies prepare for their futures, investors are encouraged to monitor developments closely.