Siemens Limited, the Indian subsidiary of Siemens AG, has announced the approval of a proposal to demerge its energy business.

The new company, Siemens Energy India Limited, will be a separate legal entity and is set to be listed on the BSE [Bombay Stock Exchange] Limited and the National Stock Exchange of India Limited (NSE).

Shareholders of Siemens Limited will receive one share of Siemens Energy India Limited for each share they hold in Siemens Limited.

While Siemens Limited will maintain its focus on industry, infrastructure and mobility technology, Siemens Energy India Limited will concentrate on energy technology, aiding customers in the transition to a more sustainable world.

The company will provide solutions across the entire energy value chain ranging from power and heat generation, and transmission to storage.

The portfolio will include conventional and renewable energy technologies such as gas and steam turbines, hybrid power plants operated with hydrogen along with power generators and transformers.

The demerger is expected to result in the formation of two distinct companies, each with a sharpened focus to better serve their respective markets and customer bases.

The process, including obtaining necessary approvals and the subsequent listing of Siemens Energy India, will be completed by 2025.

Siemens Limited managing director and CEO Sunil Mathur stated: “The demerger will enable both companies to pursue their specific strategies, focus on their core portfolios and take decisions on capital allocation.

“This will enable the full value of each of the businesses to be unlocked for the benefit of the shareholders.”

The announcement comes at a time when India is projected to register its most rapid power generation growth since the fiscal year 2011 to 2012 in fiscal 2025, according to Reuters.

Siemens AG has been actively considering future investments in India in light of the country’s ongoing grid upgrades and electrification efforts.

Siemens Limited has also revealed plans to expand two of its 32 factories located in Goa, western India. This expansion is part of a significant capital expenditure investment totalling Rs10 billion ($120m).