Vedanta shares fall 3% after Foxconn JV exit, recover later

Shares of Vedanta fell 3 per cent in Tuesday's trade after Foxconn pulled out of a $19.5 billion joint venture on making semiconductors in India. While a Vedanta spokesperson said the Anil Agarwal company was fully committed to its semiconductor fab project and that it has lined up other partners to set up India’s first foundry, the stock was largely trading lower.

The scrip fell 1.52 per cent to hit a low of Rs 274.90 on BSE. It, however, cut some losses to trade at Rs 277.95 by noon.

Foxconn said it was working to remove the Foxconn name from what is now Vedanta's fully-owned entity. Vedanta said it would continue to grow its Semiconductor team and said it has the license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM).

"We will shortly acquire a license for production-grade 28 nm as well. Vedanta has redoubled its efforts to fulfil the Prime Minister's vision for semiconductors and India remains pivotal in repositioning global semiconductor supply chains," the Vedanta spokesperson said.

Shares of Vedanta are down 12 per cent year-to-date against a 1.69 per cent drop in the BSE Metal index during the same period.

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The Vedanta news came after Vedanta on Friday said it would take over from its holding company the ownership of a joint venture with Taiwan's Foxconn that was set up to make semiconductors.

The Vedanta board had on Friday approved acquisition of 100 per cent of Vedanta Foxconn Semiconductors Private Limited and Vedanta Displays, wholly owned subsidiaries of of Twin Star Technologies Limited via share transfer at face value.

Twin Star Technologies is a wholly owned subsidiary of Volcan Investments Limited, the ultimate holding company of Vedanta Limited. The Vedanta Foxconn JV recently re-submitted an application to set up an electronic chip manufacturing plant. under the modified semiconductor programme.

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