Siemens Energy may see up to $180 million in outflows after MSCI exit

Siemens Energy India, which debuted on the Indian stock exchanges on Thursday, could see passive outflows of up to $180 million as it exits the MSCI Global Standard Index just a day after listing, according to estimates by Nuvama Alternative & Quantitative Research.

Global index provider MSCI will delete Siemens Energy India from its Global Standard Index (Large Cap segment), effective post-market close on June 20. The exit, Nuvama notes, could trigger “estimated passive outflow in the range of USD 170–180 million,” although the brokerage added that a more accurate estimate would be available once the stock begins trading.

“If stock trades at lower circuit then implementation will get postponed,” Nuvama had said.

Siemens Energy India began trading on Thursday, June 19, after being spun off from Siemens Ltd earlier this year. The stock was listed at Rs 2,850 and quickly hit the 5% upper circuit at Rs 2,992.45 on the BSE, bolstered by investor optimism around the company’s role in India’s expanding power transmission and distribution (T&D) sector.

The shares are currently part of the ‘T’ Group—meaning they will be settled on a trade-for-trade basis for the first ten trading sessions, limiting intraday speculation.

Limited domestic index impact

While MSCI exclusion is expected to lead to sizable passive outflows, Siemens Energy’s removal from domestic indices such as the NSE and BSE early next week is likely to be more muted. “The outflows here are expected to be minimal due to its negligible weight and passive tracking will be lower,” Nuvama said, adding that more clarity would follow the first day of trade. The brokerage is also monitoring how FTSE will respond post-listing.

Strong debut, bullish forecasts

Despite the risk of outflows, brokerages remain bullish on Siemens Energy’s long-term prospects.

Jefferies estimates nearly 30% upside potential with a target price of Rs 3,700, calling it “India’s largest listed pure-play power T&D equipment player at $10 billion+ market cap.” The brokerage forecasts a 40% EPS CAGR over FY24-27E, citing a strong T&D pipeline and operating leverage.

Motilal Oswal resumed coverage with a target of Rs 3,000 and a “Buy” rating, projecting a 25%/31% CAGR in revenue and PAT over FY25-27 and an EBITDA margin expansion to 21.4% by FY27. “Margins have already started expanding in 5MFY25,” the brokerage noted.

HDFC Securities echoed the optimistic outlook, citing Siemens Energy’s diversified offerings in power generation, green hydrogen, and grid automation, as well as exclusive rights in South Asia. It sees a 30% PAT CAGR supported by robust cash flows and innovative technologies.

Background and business profile

Siemens Energy India was demerged from Siemens Ltd in April 2025. The newly listed company focuses on transmission, distribution, and small- to mid-sized turbines. Its offerings range from 250 MW industrial turbines to 800 MW utility-scale generators, and includes power transformers up to 765 kV and EPC services.

The firm is expected to benefit from India’s planned Rs 3 trillion transmission investments through FY30, especially in high-voltage (400 kV and 765 kV) segments. Capex plans include Rs 4.6 billion for doubling transformer capacity, Rs 3.3 billion for GIS units in Goa, and Rs 0.6 billion for vacuum interrupters—some of which will cater to export markets.

Also read | Siemens Energy shares zoom 5%, hit upper circuit post listing. Brokerages project 30% upside

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)