Vedanta shares plunge 9% after clarification on chip biz

Market


Mumbai: Vedanta shares plumbed as much as 8.7% in morning trade on the National Stock Exchange after the company clarified that its “ultimate holding company” Volcan Investments would undertake the business of manufacturing semi-conductors and not Vedanta as was reported in sections of the media.

The clarification came after closing hours on Thursday. The share currently traded 6.7% lower at 293.2 on heavy volumes. Intraday delivery volumes stood at 40.98% or 78.94 lakh shares against the traded quantity of almost 1.93 crore shares.

The share had rallied 13% over the past two days on the news that Vedanta and Taiwan’s Foxconn would jointly invest 1.54 trn to set up a chip making plant in Gujarat.

The correction in shares comes in the backdrop of the Nifty trading down over a percent below the 17700 mark today.

“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,” the company informed the bourses.

On Tuesday, Vedanta signed two pacts with the Government of Gujarat to set up a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit in the Ahmedabad district of the state.

For the project, Vedanta will form a joint venture with Taiwanese multinational electronics contract manufacturer, Foxconn. Under the JV, Vedanta will hold a majority stake of up to 60%, and the remaining 40% will be held by Foxconn.

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