Siemens Energy’s demerged Indian unit – Siemens Energy India Limited or ‘SEIL’ – made its stock exchange debut on Thursday, in a keenly watched emerging market move by the German vendor.
The lucrative unit’s demerger from its parent company saw it debut at a listing price of ₹2,840 ($32.85) per share on the National Stock Exchange of India, already up 14% on its stated discovery price of ₹2,478. Its demerger price was in the region of ₹2,350.
At one point intraday, the stock rose as high as ₹2,982 given the company is expected to be India’s largest listed pure-play power transmission and distribution equipment provider. However, at end of day’s session the stock closed 5% lower at ₹2,735.
SEIL has a firm foothold in India’s lucrative and burgeoning, but extremely competitive, energy market. It supports the integration of renewable energy, modernization of the national grid, and decarbonization of key industries.
“Make In India” Initiative
As India pursues its officially stated goal of achieving net-zero emissions by 2070, SEIL said it would be part of the government’s “Make in India” initiative.
The company is making what it describes as “significant investments” in India in expanding its local manufacturing footprint, including an investment of ₹4.6 billion ($53.2 million) in its Kalwa Transformers facility.
In addition, SEIL has launched a “competency hub” to “foster innovation in energy technologies and position India as a global innovation leader.”
Guilherme Mendonca, managing director and chief executive officer of SEIL, said: “With this listing we reaffirm our long-standing commitment to India’s energy future. As India advances toward becoming a $7 trillion economy, a strong and resilient energy system will be essential.
“Siemens Energy India Limited with its dedicated team is ready to support this important journey for India and its people.”
Furthermore, the company which employs more than 4,000 professionals, has ten manufacturing sites and eleven regional offices, also serves neighboring countries in the South Asian subcontinent including Bhutan, Nepal, Sri Lanka and Maldives.
SEIL’s successful listing is also welcome news for Siemens itself and its Siemens Energy sub-unit from which the Indian unit demerged and listed on Thursday. Depending on the stock’s performance, a substantial windfall may follow.
As things stand, Siemens subsidiaries hold 69% in SEIL and the subsidiaries of Siemens Energy hold 6%, with the remainder in free float for retail and institutional investors alike.
Very Different From Siemens Gamesa’s Fortunes
It is a marked contrast Siemens Energy’s wind unit – Siemens Gamesa – which has been buffeted by operational headwinds and losses in the face of competition from Chinese rivals who often undercut it on prices, as acknowledged by CEO Christian Bruch last year.
That unit posted another quarterly loss in April of €249 million ($285 million). Ironically, the figure included a loss from the disposal of a majority stake of Siemens Gamesa’s Indian (and Sri Lankan) wind business.
That happened in March, when Siemens Gamesa divested 90% of the business to a TPG-led investor group, while retaining a 10% stake.
The deal included transferring approximately 1,000 employees and two manufacturing plants in India to the new company. However, Siemens Energy, via Gamesa, will continue to support the new entity through a long-term technology licensing agreement.