Vedanta share price slumps over 6% after company issues clarification on semiconductors' business | Details

Vedanta share price declined more than six per cent on Friday after the company issued clarification regarding the proposed business of manufacturing semiconductors. After the company cleared the air around semiconductors' business and said it is with the holding company (Volcan Investments Limited), the stock tumbled around 6.5% to Rs 287 per share in BSE intraday trade on Friday.  

"We reiterate that the proposed business of manufacturing semiconductors is not under Vedanta Limited and we understand that it will be undertaken by the ultimate holding company of Vedanta Limited, Volcan Investments Limited," it said in a regulatory filing on September 15.   

Earlier, Vedanta share price had risen around 15% in the last two trading sessions when Vednata entered into an agreement with a Taiwanese electronics manufacturing firm to set up India's first semiconductor plant in Gujarat.   

Vedanta and Taiwanese electronics manufacturing giant Foxconn will make one of the largest ever investments of Rs 1.54 lakh crore in setting up India's first semiconductor plant in Gujarat, news agency PTI had reported earlier.  

The 60:40 joint venture of Vedanta-Foxconn will set up a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit on a 1000-acre land in the Ahmedabad district.  

"The plant will start production in two years," Vedanta chairman Anil Agarwal had told PTI after signing the Memorandum of Understanding (MoU) with the Gujarat government on Tuesday.  

Semiconductor chips, or microchips, are essential pieces of many digital consumer products - from cars to mobile phones and ATM cards. The Indian semiconductor market was valued at USD 27.2 billion in 2021 and is expected to grow at a healthy CAGR of nearly 19 per cent to reach $64 billion in 2026. But none of these chips is manufactured in India so far.  

A massive shortage in the semiconductor supply chain last year affected many industries, including electronics and automotive.