Vedanta Ltd, an Indian company owned by billionaire Anil Agarwal, has incurred consecutive losses for its investors in the past two trading days.
Adding to the company’s woes, the shares have further plummeted due to a decision by the Government of India.
Anil Agarwal’s Ambition to Establish a New Silicon Valley in India
Anil Agarwal aims to establish a new Silicon Valley in India through the semiconductor chip manufacturing division of Vedanta Ltd.
The objective is to lower the prices of electronic goods, including automobiles, throughout India, while also enabling the production of high-quality electronic products domestically.
To achieve this goal, Anil Agarwal has decided to establish a dedicated chip manufacturing unit. He had previously partnered with Taiwan’s Hon Hai Precision for this venture.
Vedanta Limited’s Disappointment with Government Rejection
Vedanta Limited had applied for the ongoing PLI scheme initiated by the Indian government to promote semiconductor chip manufacturing in the country.
This application held the potential for billions of dollars in investments. However, the government rejected the application citing unmet criteria.
The government’s decision has led to a significant decline in the company’s shares, plummeting from ₹300 to ₹280 in just three days.
Impact on Shareholders
Shareholders are left to face the repercussions of the government’s rejection. Despite Vedanta Ltd’s history of providing substantial dividends to its shareholders, experts still consider it a good stock to buy.
The optimism stems from the expectation that Vedanta will resubmit the rejected application and excel in the semiconductor chip manufacturing business.
If Vedanta succeeds in this endeavor, investors stand to benefit directly. Additionally, the company’s rapid reduction of debt presents an attractive prospect for Vedanta shareholders.
