Vedanta on Thursday clarified that the proposed business of manufacturing semiconductors is not under the listed entity Vedanta Ltd (listed entity) but will be undertaken by the holding company of Vedanta Ltd, Volcan Investments Ltd.
After signing an agreement with the Gujarat government for investing ₹1.54 lakh crore in a semi-conductor plant, the Anil Agarwal-led company in a statement had said Vedanta will hold 60 per cent stake in the joint venture company while Foxconn will own 40 per cent.
Following this, Vedanta shares listed on stock exchange rallied to from ₹277 to ₹305 on Wednesday. Analysts had raised question on debt-laden Vedanta’s ability to raise such huge amount for investment in semi-conductor plant.
On Thursday, Vedanta clarified that the proposed business of manufacturing semiconductors will be under Volcan Investments Ltd. Vedanta issued a clarification after market hours.
All the benefits accruing from the semi-conducted business, as expected, will benefit the promoters’ holding company Volcan Investment and not the shareholders of Vedanta, said an analyst requesting anonymity.
Maharashtra upset
Meanwhile, the opposition parties in Maharshtra has taken a dig on the newly inducted BJP and faction of Shiv Sena government for losing Vedanta investment to Gujarat.
Former industry minister Subhash Desai said the MVA government had offered concession of about ₹40,000 crore to the two companies during the negotiations. “We have come to know that the Gujarat government is giving only a faction of this amount and it clearly shows that the Centre had leaned on the two companies to set up the project in Gujarat,” he said.
Promise made
In a bid to calm down the political nerves, Anil Agarwal, Chairman of Vedanta Group said Vedanta-Foxconn has been professionally assessing the site for the multi-billion dollar investment. This is a scientific and financial process which takes several years and the company started this about two years ago, he said in twitter. “Our team of internal and external professional agencies shortlisted a few States including Gujarat, Karnataka, Maharashtra and Tamil Nadu to help achieve our purpose,” he added.
Gujarat was decided a few months ago as they met our expectations. But in the July meeting with the Maharashtra leadership, they made a huge effort to outbid other States with a competitive offer. We have to start in one place and based on professional and independent advice we chose Gujarat, he said.
“We will create a pan-India ecosystem and are fully committed to investing in Maharashtra as well. Maharashtra will be our key to forward integration in our Gujarat joint venture,” said Agarwal.