Shares of Siemens Ltd fell more than 10% on May 22 after the company said its board approved the sale of its low-voltage motors and geared motors business to Siemens Large Drives India, a subsidiary of Siemens AG, for Rs 2,200 crore.

The stock hit a low of Rs 3,338, down 11% from its previous close. The stock was trading at Rs 3,363 on the BSE at 10:06 am, down 9.45%, while India’s benchmark Sensex rose 0.08% to 61,780.

The board of directors of Siemens Limited has approved the sale and transfer of the low-voltage motors and geared motors business, including the related customer service business, to Siemens Large Drives India Pvt Ltd, a wholly-owned entity of Siemens AG, for a consideration of Rs 2,200 crore, effective October 1, 2023, the company statement said.

Meanwhile, brokerage Nomura downgraded the stock from neutral and cut its price target to Rs 3,521 from Rs 3,008 per share. The brokerage said there were concerns about the fairness of the valuation of the business being sold to the parent company.

The board has also decided to consider distributing 100% of the sale consideration less applicable capital gains tax and any other applicable taxes, if any, as a special dividend at the first Board meeting following the closing of the proposed transaction.