In an announcement to the BSE, Siemens India said it had transferred 100% stake in Siemens India Systems (SISL) to a subsidiary of Siemens, Germany.
The parent Siemens AG has also bundled three sectors of SISL's software business in - industry, energy and healthcare - by creating a central software house under the Corporate Technology department for its captive business.
The new SISL will have a dual mandate, first as a software factory catering to Siemens's R&D and product development initiatives worldwide and as an offshore development centre for Siemens IT Solutions and Services group for its external customers.
About 70% of SISL's revenues come from the parent company. The release also said that the business model had changed from an entrepreneurial model to a factory model to leverage India's cost advantage. This had resulted in lower profit margins as profit before tax fell from Rs 160 crore in year ended September 2007 to Rs 73 crore in 2008. Sales too dropped from Rs 1,023 crore to Rs 994 crore in the same period.
Grant Thornton has arrived at the valuation figure of Rs 449 crore.
Armin Bruck, MD, Siemens, said, "The realignment of the software business is primarily keeping in mind interest of our shareholders by separating low margin business and focusing on acquiring high margin businesses."
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