Vedanta shares conclude with a 3% decline following Foxconn’s withdrawal from the semiconductor joint venture.

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In the early hours of Tuesday’s trading session, Vedanta shares experienced a drop of approximately 3% subsequent to Foxconn’s withdrawal from a significant $19.5 billion joint venture aimed at semiconductor production in India.

Foxconn Vedanta deal
Foxconn Vedanta deal

Following Foxconn’s withdrawal from a $19.5 billion joint venture (JV) with Vedanta to manufacture semiconductors in India, Vedanta shares witnessed a decline of approximately 3% during early Tuesday trading. The stock opened at Rs 275 per share, dropping 2.6% to Rs 274.90 soon after. On the National Stock Exchange (NSE), the shares ended the day 1.59% down at Rs 277.75.

Foxconn and Vedanta joined together in 2022 to construct a semiconductor facility in Gujarat, India. Vedanta will have the larger ownership in the factory according to the agreement between the two companies. However, on July 10, 2023, Foxconn declared its decision to discontinue the joint venture with Vedanta in order to explore alternative development opportunities. Foxconn also mentioned its plans to remove its name from the now fully-owned entity of Vedanta.

Despite the withdrawal, Ashwini Vaishnaw, Minister for Railways, Communications, Electronics & Information Technology, expressed on Twitter that both Foxconn and Vedanta remain committed to India’s semiconductor mission and Make in India program.

Vedanta confirmed its dedication to expanding its semiconductor team, having secured the license for production-grade technology in the 40 nm category from a renowned Integrated Device Manufacturer (IDM). The company is also pursuing a license for production-grade 28 nm technology.

In contrast to the BSE Metal index’s 1.69% loss during the same time period, Vedanta shares have fallen by 12% year to date.

On Friday, Vedanta announced its board’s approval for the acquisition of 100% stakes in Vedanta Foxconn Semiconductors Pvt Ltd and Vedanta Displays, both fully owned subsidiaries of Twin Star Technologies Limited, through share transfer at face value. Vedanta Limited is a major subsidiary of Twin Star Technologies, which is wholly owned by Volcan Investments Limited. Recently, the Vedanta Foxconn JV submitted an application to establish an electronic chip manufacturing plant under the modified semiconductor program.

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