Mining mogul Anil Agarwal-led Vedanta Assets’ credit score profile will unlikely be weighed down by the group’s deliberate Rs 1.54 lakh crore foray into semiconductor manufacturing, S&P World Scores stated on Monday.
“It is because the corporate has reiterated that the USD 20 billion associated funding can be carried out outdoors of Vedanta Assets. The enterprise can be undertaken in a separate entity beneath Vedanta Assets’ holding firm Volcan Investments Ltd,” it stated.
Vedanta and its accomplice and Taiwanese electronics manufacturing big Foxconn final week signed a pact with the Gujarat authorities for establishing a semiconductor manufacturing facility in Gujarat.
Semiconductor chips, or microchips, are important items of many digital client merchandise – from automobiles to cell phones and ATM playing cards.
The Indian semiconductor market was valued at USD 27.2 billion in 2021 and is predicted to develop at a compound annual progress charge (CAGR) of almost 19 per cent to achieve USD 64 billion in 2026. However none of those chips is manufactured in India to this point.
The ranking company stated any potential credit score affect of the deliberate investments within the semiconductor enterprise will rely on the main points of the funding plan, which have but to emerge.
“We might be careful for any change in Vedanta Assets’ dividend coverage, to help servicing of any debt at Volcan for the semiconductor enterprise,” it stated. “We imagine Vedanta Assets will prudently handle its investments in order that it doesn’t put debt servicing in danger.” The investments, it stated, will even probably occur over a protracted time frame.
“Our ranking on Vedanta Assets doesn’t assume any materials publicity by the corporate or its key subsidiary, Vedanta Ltd, to the semiconductor enterprise over subsequent 12-24 months,” S&P added.
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