Nuvama Alternative & Quantitative Research expects Siemens Energy India Ltd. to list within 30 days of its demerger record date, set for April 7.
Friday will be the last day to buy Siemens Ltd.'s shares to be eligible for SEIL shares under India's T+1 settlement cycle. Shareholders will receive one SEIL share for every Siemens share held.
The demerger follows the National Company Law Tribunal's approval on March 26 and comes nearly five years after Siemens AG — the global parent of Siemens — spun off its energy business globally in 2020.
Until SEIL lists, its price will be determined by the difference between Siemens's closing price on April 4 and the open price discovered in the special pre-open session on April 7, according to Nuvama. The company will also be the 51st constituent in the Nifty Next 50 and other broader indices from the record date.
However, as it will not be traded live, its market capitalisation will remain static until listing. After trading begins, its live market capitalisation will be used for weight calculations over three sessions.
This is similar to ITC Ltd.'s demerger of ITC Hotels, where the newly formed entity was temporarily included in the NSE Nifty 50 before its listing determined its final index placement.
Additionally, SEIL will not be introduced in derivatives immediately upon listing. According to current regulations, a stock must have at least six months of trading history and meet all quantitative criteria before qualifying for derivative inclusion, which will then require the Securities and Exchange Board of India's approval.
Shares of Siemens closed 0.65% lower at Rs 5,248.55 apiece on the NSE, compared to a 0.35% decline in the benchmark Nifty. The share price has fallen 7.03% in the last 12 months and 19.7% on a year-to-date basis.
Fifteen out of the 25 analysts tracking Siemens have a 'buy' rating on the stock, five recommend 'hold' and as many suggest 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 17.2%.
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