Sumitomo Chemical India shares zoom nearly 16%; here is why

Shares of Sumitomo Chemical India Ltd extended their gains in Friday's trade, surging 15.57 per cent to a high of Rs 509.55. The company is a subsidiary of Japan-based Sumitomo Chemical Co Ltd, which owns a 75 per cent stake in the Indian entity.

The rally appears to have been triggered by an announcement from its parent company. Sumitomo Chemical Co said its wholly owned South Korean subsidiary, Dongwoo Fine-Chem Co Ltd, has signed an agreement with Samsung Electro-Mechanics Co Ltd to establish a joint venture (JV) that will manufacture glass core substrates for advanced semiconductor packages, a key component used in next-generation chip packaging.

It added that the new company is scheduled to be established in 2026, subject to the completion of necessary procedures, including approvals from the relevant authorities.

"In recent years, driven by the growing adoption of generative AI, expanding data center investments, and rising demand for high-performance computing, semiconductors have been required to achieve even greater integration and lower power consumption. As a result, semiconductor package substrates are also needed in order to support further increases in size and density. This has led to glass core substrates garnering attention as a technology that supports next-generation semiconductor packages,"  Sumitomo Chemical Co also said.

"The New Company will be established as a business for glass core substrates for advanced semiconductor packages, and will bring together the technologies and expertise of both companies. It is scheduled to establish a supply system by the second half of fiscal 2027. Following this, the New Company will gradually expand supply capacity and grow the glass core substrate business," it further stated.

Back home, Sumitomo Chemical India's counter saw high trading volume alongside price action. Around 14.30 lakh shares were last seen changing hands on BSE, higher than the two-week average volume of 18,000 shares. Turnover on the counter came at Rs 69.70 crore, commanding a market capitalisation (m-cap) of Rs 25,082.07 crore.