Siemens' Initial Public Offering proves successful: share prices ascending
Siemens Sets Sights High in India: A Significant Stride in the DAX Company's Journey
Siemens Energy India Limited, the energy business arm of Siemens, has triumphantly completed its IPO in India, marking it as an independent, listed company. This move has further bolstered the Siemens share, making it one of the top gainers in the German benchmark index with a gain of 1.5 percent.
Siemens Energy India Limited has now found its footing on the BSE Limited and the National Stock Exchange of India Limited. The parent company continues to hold 69 percent of the shares, while Siemens Energy maintains six percent ownership in the listed Indian company.
Roland Busch, Siemens CEO, remarked on this momentous occasion, "This step fosters and simplifies our business structure in India, demonstrating our long-term commitment to this rapidly growing and strategically important market. By granting each business autonomy, we empower them to achieve independent success, ultimately benefiting all shareholders and spurring growth for both Siemens and Siemens Energy."
In the Indian market, Siemens has taken a substantial step forward with the IPO of Siemens Energy India Limited. Moody's has rated the company with a 'positive' outlook and 'BAA2,' and the share remains a long-term core investment on the German stock exchange, catering to both aggressive growers and more defensively oriented investors.
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Notably, Siemens Energy India has emerged as India's largest listed pure-play power transmission and distribution (T&D) equipment company, outperforming competitors like Hitachi Energy and GE Vernova. As part of India's expanding power infrastructure, the company stands ready to tackle transmission bids worth ₹1.5 lakh crore in FY25, a significant increase from the previous year's ₹39,500 crore. Siemens Energy intends to double its power transformer capacity with a planned capital expenditure of ₹460 crore, reflecting the management's confidence in capturing the growth opportunity.
Analysts predict over 30-40% earnings compounded annual growth rate (CAGR) between FY24-27 for Siemens Energy India Limited, backed by a robust order pipeline and operational leverage. With revenue projected to double by FY27, Siemens Energy India's promising outlook underscores its substantial growth prospects, aligning with India’s power sector capital expenditure expected to grow at 21% CAGR.
The demerger has allowed Siemens to unlock value by creating a focused, publicly traded entity dedicated to energy infrastructure in India. This strategic move provides a clearer investment proposition for investors focused on the T&D sector, while enabling Siemens Energy India to pursue its ambitious growth and expansion plans independently.
The Siemens Energy India shares had a successful debut on the Indian stock exchanges, with prices above the implied demerged valuation, and analysts from institutions like Jefferies, SBI Securities, and HDFC Securities have given buy ratings with target prices ranging from ₹3,000 to ₹3,350, signaling an upside potential of 12-19% from initial trading levels.
This IPO not only serves as a financial move but also represents a strategic milestone, reinforcing Siemens’ commitment and leadership in India’s energy transition and infrastructure development.
- The successful IPO of Siemens Energy India Limited, a pure-play power transmission and distribution equipment company, has positioned it as a significant entity in the Indian market, potentially boosting the finance of Siemens Energy and Siemens as a whole.
- Analysts foresee substantial growth for Siemens Energy India Limited, predicting a high earnings compounded annual growth rate (CAGR) of over 30-40% between FY24-27, which could potentially attract more investors and bolster the company's financial standing.
