The oils to metals conglomerate, Vedanta had announced plans to form a joint venture with Taiwan’s Foxconn to support Prime Minister Narendra Modi’s plans to make India a semiconductor manufacturing hub, in February this year.
The company is seeking various incentives and 1000 acres (405 hectares) of free land from states for its $20 billion foray into the semiconductor space, as per a Reuters report.
According to it, Vedanta is asking for the land free of cost, on a lease for 99 years, even though it is seeking federal incentives under a Modi programme offering fiscal support. It requires 700 acres for its own facility and the remaining 300 acres of land for ancillaries.
Vedanta has told state governments that its operations would help them generate $2.2 billion in tax revenues over 20 years and create up to 100,000 direct and indirect jobs. It is in the advanced stages of reviewing proposals from Telangana, Karnataka and Maharashtra.
Semiconductor chips are the core of many future critical technologies such as artificial intelligence and 5G. However, their production is limited to a few countries like Taiwan and the United States. India is a late entrant in the sector, but it is actively luring companies and wants them to “usher in a new era in electronics manufacturing,” by December.
Primarily, India imports semiconductors from China, Singapore, Hong Kong, Japan and the United States.
As an effect of the pandemic and the ongoing Russia Ukraine war, there was a shortage of semiconductors that led to the closure or lowering of production by several firms from diverse industries, as per the Economic Survey for 2021-22.
The share price of Vedanta Limited dropped marginally by 0.35% on Thursday’s intraday trades. The scrip has lost 2.65% in the past 5 days, however, it has gained 0.21% in the past month and 35.26% in the past six months.
Chip plants typically consume electricity and water in huge quantities and their erratic supplies often concern industry in India. Vedanta is demanding water and power at concessionary and fixed prices for a period of 20 years, as a part of lobbying the states.
Quarterly Results
Vedanta declared its financial results for Q4FY22, on Thursday. Its consolidated net profit dropped 4.82% to ₹7,261 crores as against a profit of ₹7,269 crores posted during the same quarter last year. It has received its highest-ever EBITDA of ₹13,768 Cr in the quarter. It achieved a record consolidated revenue of Rs 39,342 crore in 4QFY22 Rs 27,874 crore, with 41% YoY and 17% QoQ growth, mainly due to higher sale volumes and improved commodity prices.
Dividend Declared
The company will pay ₹ 117.1 billion in dividends to its shareholders, even though its profit fell for the first time in six quarters due to elevated raw material costs. It will be paying a dividend of ₹ 31.5 per share which is a whopping 3150% of its face value!
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