NEW DELHI: Anil Agarwal-led Vedanta Resources’ credit profile is unlikely to be weighed down by the group’s planned Rs 1.54 lakh crore foray into semiconductor manufacturing, according to a report.
Rating agency S&P Global also noted that Vedanta Resources doesn’t assume any material exposure by the company or its key subsidiary, Vedanta Ltd, to the semiconductor business over the next 12-24 months.
“This is because the company has reiterated that the 1.54 lakh crore related investment will be carried out outside of Vedanta Resources. The business will be undertaken in a separate entity under Vedanta Resources’ holding company Volcan Investments Ltd,” reads the report.
Last week, Vedanta Ltd, along with Taiwanese chip maker Foxconn, announced to invest Rs 1.54 lakh crore to set up a semiconductor ecosystem in Gujarat. The proposed semiconductor manufacturing fab unit will operate on the 28nm technology nodes and the display manufacturing unit will produce Generation 8 displays catering to small, medium and large applications.
“We believe Vedanta Resources will prudently manage its investments so that it doesn’t put debt servicing at risk,” reads the report.
Sharing the same view Kaustubh Chaubal, senior vice-President at Moody’s Investors Service, said the proposed semiconductor project will have no immediate impact on Vedanta Resources Limited’s credit profile.