Paras Defence OSAT plan: ₹6,200 crore MP facility in 2026

What has been announced

Paras Semiconductors Private Limited, a subsidiary of Paras Defence and Space Technologies Limited, has signed a Memorandum of Understanding (MoU) to set up a greenfield advanced IC packaging OSAT facility in Madhya Pradesh. The proposed investment is approximately ₹6,200 crore. The planned site is the Indore-Ujjain region.

The company positioned the facility as part of the semiconductor supply chain where packaging and testing form the bridge between chip fabrication and end-use electronic systems. The announcement also highlights the use of advanced packaging processes that are increasingly required for modern chips used in defence and strategic electronics.

The counterpart and the scope of collaboration

The MoU has been signed with the Department of Science and Technology acting through the MP State Electronics Development Corporation (MPSeDC). The filing describes it as a strategic collaboration that will integrate expertise and resources from both sides to facilitate the project in the state.

The facility is planned as a greenfield unit, meaning it will be built from scratch rather than expanded from an existing plant. The article frames the investment size as an indicator of the ambition to build domestic capability in sophisticated semiconductor manufacturing processes.

Where the facility will come up

The proposed OSAT facility will be located in the Indore-Ujjain region of Madhya Pradesh. The Indore-Ujjain corridor is referenced in the MoU disclosure as the intended region for setting up the unit.

No commissioning date, capacity details, or phased investment schedule were provided in the text. The announcement focuses on the intended location and the technologies that the facility is designed to handle.

What technologies the OSAT unit will cover

Paras Semiconductors said the facility will cover a wide set of advanced packaging technologies. These include:

• 3D heterogeneous integration
• 2.5D/3D advanced packaging
• hybrid bonding
• ultra-high-density fan-out packaging
• chiplet integration
• wafer bumping
• flip-chip assembly
• testing and reliability assessments

The inclusion of testing and reliability work indicates the project is not limited to assembly, but also aims to cover qualification-related processes needed for high-reliability applications.

Exchange disclosure and regulatory reference

The intimation was submitted to stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The filing was confirmed by Minal B Bhate, Company Secretary and Compliance Officer of Paras Defence and Space Technologies Limited, in a disclosure dated July 22, 2026.

The text does not specify further regulatory approvals, incentives, or land allocation decisions linked to the project. It also does not provide a definitive timeline for construction or start of operations.

Paras Defence’s earlier OSAT entry and positioning

Separate from the Madhya Pradesh MoU, the material also references that Paras Defence formed a new subsidiary, Paras Semiconductor Pvt Ltd, to enter the semiconductor packaging segment. The OSAT initiative is described as focusing on advanced heterogeneous packaging and 3D packaging for AI, HPC, networking, and data centre chips, with a 70% stake noted in the cited context.

The OSAT push is also described as a move into a dual-use area, supporting defence-related applications along with certain computing and networking applications. Another note in the text adds that first products are expected in FY27, although it does not link that timing directly to the Madhya Pradesh facility.

Other recent deals referenced alongside the OSAT plan

The article also contains details of Paras Defence entering an exclusive IP License Agreement with Tandem Defense LLC to manufacture and commercialize the Guardian-1 Interceptor within India. The agreement was signed on June 30, 2026, and is valid for an initial period of 12 months, renewable by mutual consent.

The Guardian-1 Interceptor is described as a high-speed, battery-powered counter-drone system developed by Tandem Defense’s parent, Autonomous Power Corporation (Powerus). The company stated that the transaction is not a related party deal and that Paras does not hold any shareholding in Tandem Defense LLC.

In addition, the text references an April 2026 10-year exclusive agreement with Northstar USA (Bandak Aviation) related to aviation refuelling systems for Indian Armed Forces.

Orders, execution timelines, and other project references

A separate update states Paras has received an order from DRDO, Ministry of Defence valued at approximately ₹80.28 crore (including taxes) for development of a high precision optical system for air defence applications.

The text also includes commentary on execution timelines: defence engineering execution timelines were described as varying from 4 months to 9 months, and optics execution timelines from 6 months to 18 months for space applications. It also references an order book of ₹900 crore and suggests the average execution period is within a year.

Another MoU discussed in the provided material relates to a proposed optics park with the Maharashtra government, where an investment requirement of ₹10,000 crore is mentioned. No detailed capex plan or timeline was provided, with commentary indicating capex would depend on a gradual ramp-up plan.

Market context: stock details and broker references in the text

The material lists Paras Defence and Space Technologies Ltd trading at ₹1,211.60 as of July 22, 2026, with a previous close of ₹1,222.60. It also references the stock ticker symbol as PRAF and notes that the company is listed and trades on the NSE.

The same set of excerpts includes multiple target price references from different contexts: a Nirmal Bang note (Dec 2025) initiating a BUY rating with a 12-month target price of ₹977, and a separate line stating an average 12-month price target of ₹703.

Key facts snapshot

Why the OSAT announcement matters

Advanced packaging and testing is a critical stage of the semiconductor value chain, especially for high-density and high-performance applications where chiplets, hybrid bonding, and 2.5D/3D packaging are increasingly used. By targeting these processes, the proposed Indore-Ujjain unit is framed as an attempt to build capabilities that are often sourced globally.

Within the material provided, Paras Defence also links its semiconductor packaging initiative to defence-related applications, particularly in systems such as optical and optronic solutions, along with select computing and networking applications. The combination of a large proposed investment and an explicit technology list signals an intention to address higher-end packaging rather than basic assembly alone.

Conclusion

Paras Semiconductors’ MoU with MPSeDC outlines a proposed ₹6,200 crore greenfield OSAT facility in the Indore-Ujjain region, with a technology scope spanning advanced 2.5D/3D packaging, hybrid bonding, chiplets, and testing. The development was disclosed to exchanges under SEBI’s Regulation 30 in a filing dated July 22, 2026.

Next milestones to watch, based on the disclosure, would be project-specific announcements on land, implementation timelines, and phased investment decisions, along with updates in subsequent exchange filings.