Shares of Vedanta Limited ended 10 percent higher on September 14 after chairman Anil Agarwal laid out the roadmap for chip output from a Gujarat semiconductor plant that his company will build with Foxconn.
“All approvals are in place and the product will be out in the market in two years,” Vedanta chairman told CNBC- TV18.
Vedanta and Taiwanese electronics giant Foxconn signed a memorandum of understanding with the Gujarat government on September 13 to set up a semiconductor and display fabrication unit near Ahmedabad.
The Indian government has been pushing for the setting up of semiconductor units, which are expensive and require precision, and has offered a slew of incentives to lure manufacturers.
The acute shortage of chips due to supply chain disruptions brought by coronavirus restrictions hit car makers to phone manufacturers hard, with governments across the world looking to reduce dependence on imports. Taiwan leads the world in manufacturing semiconductors.
Both companies would invest Rs 1.54 lakh crore to set up the facility in Gujarat, which would create one lakh job opportunities, the two firms said.
“Funding for the plant will come from the listed entity,” Agarwal said. Laptop cost can fall from Rs 1 lakh to Rs 40,000 a unit if display glass and chips are available in India, he added.
While neighbouring Maharashtra may have lost out on the semiconductor plant, Vedanta is planning to set up a hub for iPhones, televisions and cellphones in the western state.
The company is looking to enter the electric vehicle space as well, Agarwal said.
Gaining for the fifth straight session, Vedanta ended at Rs 305 apiece on the NSE. The stock has had an eventful 2022 so far, giving negative return of 14 percent.
Analysts have mixed views on the stock. Religare Broking has a “sell” call on Vedanta with the target price of Rs 235.
In their last available reports, Centrum Broking and JPMorgan have a “buy call” with target prices of Rs 507 and Rs 490 respectively.
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