Oil-to-metal conglomerate Vedanta is said to be in talks with banks to raise a debt of around $3 billion to support its semiconductor and display manufacturing plants, as the company races to become India's first semiconductor chipmaker.
Vedanta is a globally diversified company that supplies zinc, lead, silver, iron ore, steel, copper, aluminum, power, oil, and gas. It has operations across India, South Africa, Namibia, Ireland, and Australia. It is the Indian subsidiary of London listed Vedanta Resources PLC.
In February, the company announced a tie-up with Taiwanese chip manufacturer Foxconn Technology in February 2022. The JV, which involved an investment of $20 billion, was to set up a chip manufacturing plant in India. The company had applied for the Rs 76,000 crore PLI offered by the Indian government. The same plant is expected to be ready by 2024.
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In January 2022, the government of India announced a Production Linked Incentive (PLI) to make India a leading manufacturer of semiconductor chips amidst the semiconductor shortage crisis. Currently, Taiwan is the market leader in semiconductor production as it makes almost all the semiconductors used globally.
According to reports, Vedanta is asking for 1000 acres of free land, cheaper water & power from state governments as part of its entry into chips and displays manufacturing. The company is targeting Mid-May for site selection and is in advanced talks with Telangana, Gujarat, Maharashtra, Odisha, and Karnataka.
The Indian semiconductors market is set to reach $63 billion by 2026, according to some estimates. The real figures might go higher as semiconductors are used in everything electronic, from cell phones to cars. The establishment of India as a semiconductor manufacturer is essential for making India a global electronics manufacturing hub.
Recently, the company announced its Q4 results wherein it disclosed a 9.8% decline in consolidated net profits against a 41.14% growth in revenues, Rs 5,799 crores and Rs 39,342 respectively. However, the Board also approved an interim dividend of Rs 31.5 per share or an equivalent of 3150% per share! The share has seen some growth this year as it closed at Rs 408.35 this Friday.
Article by Aman Agarwal.
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