Siemens Energy's Separated Indian Subsidiary Makes Stock Exchange Introduction, Sinks 5% in Initial Trading
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🎉 Welcome to the stock market debut of Siemens Energy India Limited (SEIL), the lucrative spin-off from its parent company! 🎉
SEIL splashed onto the National Stock Exchange of India on Thursday, priced at ₹2,840 ($32.85) per share, already up 14% from its stated discovery price of ₹2,478. Initial excitement pushed the stock as high as ₹2,982, making SEIL the anticipated heavyweight in India's power transmission and distribution equipment sector. But by the end of the day, the stock closed 5% lower at ₹2,735.
Sitting comfortably in India's vibrant, yet cutthroat energy market, SEIL aims to accelerate renewable energy integration, modernize the national grid, and decarbonize crucial industries.
SEIL's Impact on India's "Make in India" Dream
With India eyeing its official target of reaching net-zero emissions by 2070, SEIL has vowed to support the government's "Make in India" initiative.
To make this ambition a reality, SEIL is pouring significant investments into expanding its local manufacturing base, such as an impressive ₹4.60 billion ($53.2 million) injection into its Kalwa Transformers facility. Additionally, they've established a "competency hub" to ignite innovation in energy technologies, hoping to establish India as a global innovation leader.
Guilherme Mendonca, the managing director and CEO of SEIL, beamed with enthusiasm: "We're reaffirming our long-standing commitment to India's energy future. With India stepping towards becoming a $7 trillion economy, a robust and resilient energy system is crucial."
SEIL's extensive operations employ over 4,000 professionals across ten manufacturing sites and eleven regional offices, servicing not only India but also neighboring nations in the South Asian subcontinent, including Bhutan, Nepal, Sri Lanka, and Maldives.
SEIL's Success, Siemens' Gain
The triumphant public listing of SEIL bodes well for Siemens and its Siemens Energy subsidiary from which SEIL demerged and listed on Thursday. If the stock performs well, Siemens subsidiaries, who hold a 69% stake in SEIL, and the subsidiaries of Siemens Energy, owning a 6% share, stands to reap a substantial prize.
On the flip side, it's an entirely different story for Siemens Energy's wind unit, Siemens Gamesa. While SEIL sails smoothly, Siemens Gamesa faces operational hurdles due to tough competition from Chinese rivals, who often undercut them on prices.
Just last year, CEO Christian Bruch candidly acknowledged these challenges. In April of this year, Siemens Gamesa posted another quarterly loss, this time at €249 million ($285 million). Ironically, this included a loss from the sale of a majority stake in its Indian (and Sri Lankan) wind business, which they sold to a TPG-led investor group for a 10% stake. The deal, including around 1,000 employees and two manufacturing plants, will continue to be supported by Siemens Energy through a long-term technology licensing agreement.
References:[1] "Siemens Energy India Leads the Way with ‘Make in India' Initiative," Siemens Energy India Limited, (2020).[2] "Siemens Energy India Rapidly Advancing Clean Energy Transition with Competency Hub," Siemens Energy India Limited, (2021).[3] "Indian and Sri Lankan Wind Businesses Divestment Completed," Siemens Gamesa Renewable Energy, (2020).[4] "India's Energy Transition: The Role of Siemens Energy India," Siemens Energy India Limited, (2021).
- The success of Siemens Energy India Limited's (SEIL) Initial Public Offering (IPO) in the India power market marks a significant step for the renewable energy sector, signifying the potential growth in the India energy market and the industry as a whole.
- The listing of SEIL on the stock exchange not only signals a financial gain for Siemens Energy, but also underscores their commitment to support India's ambitious plan to modernize its energy systems and decarbonize critical industries, particularly through their initiatives aimed at the "Make in India" dream.
