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    Vedanta shares fall on semiconductors business clarification after six-day rally

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    Vedanta shares fall on semiconductors business clarification after six-day rally

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    Vedanta Group Chairman Anil Agarwal told CNBC-TV18 in an interview on September 14 that the responsibility to bring in the semiconductor products would be with Foxconn, and Vedanta will be supporting and helping them provide the land, building equity/debt, government approvals, etc.

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    Shares of Vedanta dropped over 6 percent after the company clarified that the proposed semiconductors business is not under it and would be undertaken by its holding company — Volcan Investments.
    Shares of Vedanta have fallen after six days of consecutive gains.
    The clarification came two days after it was reported that the company would build a semiconductor plant in Gujarat with Foxconn and launch the product within two years.
    At 10:11 am, shares of Vedanta were trading at Rs 292, down by 6.8 percent from the previous close on the BSE.
    "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,” said Vedanta.
    Vedanta issued a similar clarification in February this year when Foxconn and Vedanta proposed their joint venture. Previously, the company had stated that the holding company would handle semiconductors.
    “The proposed business of manufacturing semiconductors is not under Vedanta Limited, and we understand that it will be undertaken by the holding company,” Vedanta said in a regulatory filing in September.
    Vedanta Group Chairman Anil Agarwal told CNBC-TV18 in an interview on September 14 that the responsibility to bring in the semiconductor products would be with Foxconn, and Vedanta will be supporting and helping them provide the land, building equity/debt, government approvals, etc.
    Meanwhile, Kaustubh Chaubal, Senior Vice President, Moody’s Investors Service, told CNBC-TV18 that Volcan’s proposed $20 billion semiconductor project would have no immediate impact on Vedanta Resources’s credit profile.
    "We do not expect Volcan to extract any cash from Vedanta to fund this investment. Any deviation from this expectation, such that Vedanta is used as a financing vehicle for Volcan, will weigh on the company’s weak liquidity profile and pressure its B2 negative corporate family rating,” Chaubal said.
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