Shares of Vedanta fell nearly 9 percent on Friday after rising 15 percent in the last 2 sessions. The share price of the company declined after the exchanges sought clarification from the firm regarding a news item that stated that Vedanta and Taiwan's Foxconn will invest $19.5 billion under a pact to set up a semiconductor project in Gujarat.
The company clarified by saying, "we reiterate that the proposed business of manufacturing semiconductors is not under Vedanta and we understand that it will be undertaken by the ultimate holding company of Vedanta, Volcan Investments."
Reuters reported on Monday that the joint venture obtained subsidies, including on capital expenditure and electricity, from Gujarat. They plan to build separate units for semiconductor and display production near the western state's largest city, Ahmedabad, it added.
In the last 2 sessions, the stock price of the firm had risen 15 percent on the announcement of this pact, however, the stock fell after the exchanges sought clarification.
The stock fell as much as 8.6 percent in intra-deals today to its day's low of ₹287. The stock has been giving positive returns every month since July. It has risen 9 percent in August so far despite today's fall. However, before the recovery in July, the stock shed 30 percent and 21 percent in June and May, respectively. So far this year, the stock has fallen around 14 percent.
According to the report, the 60:40 joint venture of Vedanta-Foxconn will set up a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit on a 1000-acre land in the Ahmedabad district.
"The plant will start production in two years," Vedanta chairman Anil Agarwal had told PTI after signing the Memorandum of Understanding (MoU) with the Gujarat government on Tuesday.
Vedanta is the third company to announce a chip plant location in India after international consortium ISMC and Singapore-based IGSS Ventures, which are setting up in the southern states of Karnataka and Tamil Nadu, respectively.