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regular-article-logo Tuesday, 24 December 2024

Vedanta plans semiconductor plant in India by 2024

The company in February announced its partnership with global electronics manufacturing firm Hon Hai Technology group to manufacture semiconductors in the country

Our Bureau Calcutta Published 22.03.22, 02:58 AM
Representational image.

Representational image. Library

Diversified business conglomerate Vedanta could set up its proposed semiconductor plant in India in the next two years.

The company in February announced its partnership with global electronics manufacturing firm Hon Hai Technology group (Foxconn) to manufacture semiconductors in India. As part of the memorandum of understanding, a joint venture will be formed between the two companies where Vedanta will provide the majority of the equity.

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Vedanta chairman Anil Agarwal, who will also be the chairman of the joint venture company, on Monday told CNBC-TV 18 that the initial estimate in the projects will be around $2 billion.

The Union ministry of electronics and IT had earlier said that three companies — Vedanta-Foxconn JV, Singapore’s IGSS Ventures pte and ISMC — have submitted applications to set up plants to make 28 nm to 65 nm semiconductor fabs with an approximate capacity of 120,000 wafers per month with a projected investment of $13.6 billion. The fiscal support sought from the central government is to the tune of $5.6 billion.

Vedanta had also recently informed shareholders that it has lined up an investment of $500 million over the next 2-3 years in the business of manufacturing LCD glass substrates through its subsidiary AvanStrate Inc. The business decision announced last month is on account of the rising demand for smartphones, laptops and television sets because of the adoption of a hybrid work model.

Debt reduction

Agarwal said Vedanta is on the path to reduce its debt by $4 billion in three years.

“The total debt of Vedanta Resources and Vedanta Limited is $12.5 billion and this is one and half year profit of the company. So, in terms of debt, equity ratio, we are very comfortable,” Agarwal told the channel.

BPCL privatisation

Vedanta has informed its shareholders that the company will explore management of the BPCL business through profit sharing arrangement or on management fee model. A specific fund, with a strategic investor will be set up to fund the investment.

"If any opportunity comes for BPCL, Vedanta balance sheet will not be used. All the funds will come independently. We are ready to manage the company," Agarwal said.

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