Vedanta issues clarification semiconductors to be undertaken by holding co.

After a nearly 13 percent spike in Vedanta’s share price in two days, the company on September 15 issued a clarification that the proposed semiconductors business is not under it, and will be undertaken by its ultimate holding company – Volcan Investments.

The clarification came two days after it was reported that the company will be setting up a semiconductor manufacturing plant in Gujarat with Foxconn, and the product will be out in the market in two years.

The stock exchanges, in response to the news reports, sought clarification from Vedanta.

Replying to the bourses, the company said: “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.”

A similar clarification was issued by Vedanta in February this year, when the Foxconn-Vedanta joint venture was first proposed. The company had then stated that the semiconductor business would be undertaken by the holding company.

In an exchange filing dated February 16, it had said “The proposed business of manufacturing semiconductors is not under Vedanta Limited and we understand that it will be undertaken by the holding company.”

However, a press release from the company’s website dated September 13, says “Vedanta will hold 60 percent of the equity in the JV while Foxconn will own 40 percent. The JV will look at setting up a semiconductor manufacturing plant in the next two years.”

This appeared contrary to what was mentioned in the February exchange notice.

To add to the confusion, Group Chairman Anil Agarwal said in an interview with CNBC-TV18 that the funding for the JV is going to come from the listed entity. He also said that Vedanta is looking to set up an iPhone manufacturing hub in the state of Maharashtra. It was not clear whether he referred to Vedanta Ltd or Vedanta Resources, the holding company.

Vedanta’s shares closed at Rs 314.10 apiece on the BSE on September 15, which was 2.83 percent higher as compared to the previous day’s close. At the NSE, share value settled at Rs 314.20, marking a 2.81 percent jump as against the previous close. Moneycontrol