Vedanta shares fell around 3 per cent in early trade on Tuesday after Foxconn pulled out of a $19.5 billion joint venture (JV) to manufacture semiconductors in India. The stock opened at Rs 275 per share against the previous close of Rs 282.25 and plunged 2.6 per cent to Rs 274.90 shortly.
On Tuesday, the stock ended 1.59 per cent down at Rs 277.75 per share on the National Stock Exchange (NSE).
In 2022, Taiwan-based Hon Hai Technology Group, popularly known as Foxconn, and Vedanta announced a JV to make semiconductors in India’s Gujarat. According to MoU signed between the two companies, Vedanta was to hold the majority stake in the joint venture.
On 10 July 2023, Foxconn announced that to explore more diverse development opportunities it had decided not to move forward on the joint venture with Vedanta.
"Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta," Foxconn said.
However, Ashwini Vaishnaw, Minister for Railways, Communications, Electronics & Information Technology wrote on Twitter that "Both the companies Foxconn and Vedanta are committed to India’s semiconductor mission and Make in India program."
Vedanta said it would continue to grow its Semiconductor team. The Anil Agarwal-led company has the license for production-grade technology for 40 nm category from a prominent Integrated Device Manufacturer (IDM). It is looking to acquire a license for production-grade 28 nm as well.
Vedanta shares are 12 per cent down year-to-date compared to a 1.69 per cent decline in the BSE Metal index during the same period.
On Friday, Vedanta said that its board has approved the acquisition of 100 per cent stake of Vedanta Foxconn Semiconductors Pvt Ltd and Vedanta Displays, fully owned subsidiaries of Twin Star Technologies Limited through share transfer at face value.
Twin Star Technologies is a fully owned subsidiary of Volcan Investments Limited, the ultimate holding company of Vedanta Limited. Recently, Vedanta Foxconn JV filed an application to set up an electronic chip manufacturing plant under the modified semiconductor programme.