Vedanta's Share Price Drops 2% as Foxconn Exits $19B Semiconductor Joint Venture
Vedanta Limited's share price dropped by 2% during early trading on July 11.
Vedanta Limited's share price dropped by 2% during early trading on July 11. This decline followed an announcement by Foxconn, a Taiwanese company, stating its withdrawal from a $19.5 billion joint venture with Vedanta Limited in the semiconductor industry.
At 9:53 am, Vedanta's shares were trading at Rs 278 per share, showing a 1.45% decrease compared to the previous day's closing price on the National Stock Exchange. Over the past six months, the stock has experienced a negative return of 13%.
The specific reason for Foxconn's decision to exit the joint venture was not disclosed. However, they mentioned that they are currently working on dissociating the Foxconn name from the entity, which will now solely belong to Vedanta. In the previous year, Foxconn and Vedanta had agreed to establish semiconductor and display manufacturing facilities in Gujarat.
Following Foxconn's withdrawal, Vedanta has stated that it is exploring other potential partners to establish manufacturing units. Despite the withdrawal, Foxconn expressed confidence in India's semiconductor development and its commitment to supporting the government's "Make In India" initiative.
A company official informed Moneycontrol that Foxconn will continue to grow its semiconductor team and already has a license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM). They also mentioned their plans to acquire a license for production-grade 28 nm technology soon.
This development occurred shortly after Vedanta Limited's board of directors approved the acquisition of a 100% stake in Vedanta Foxconn Semiconductors (VFSPL) and Vedanta Displays (VDL) through share transfer at face value. These two entities are wholly owned subsidiaries of Twin Star Technologies Limited (TSTL), which is itself owned by Volcan Investments Limited, the ultimate holding company of Vedanta Limited.
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