Vedanta shares slip as Foxconn exits $19.5bn JV in India

What changed between Vedanta and Foxconn

Vedanta and Foxconn ended their semiconductor joint venture in India by “mutual agreement”, Foxconn said on Monday, adding it wanted to “explore more diverse development opportunities.” Foxconn also said it has determined it will not move forward on the joint venture and will remove its name from the entity, which is now fully owned by Vedanta. The partnership, announced in 2022, was positioned as a high-profile private sector push aligned with India’s semiconductor manufacturing ambitions. The withdrawal put immediate focus back on the project’s feasibility, funding and technology partnership. Vedanta, however, said it remains committed to its semiconductor fab project. The company added that it has “lined up other partners to set up India’s first (chip) foundry.”

The $19.5 billion plan and the Gujarat site

Foxconn described the venture as an effort it had worked on for more than a year to bring “a great semiconductor idea to reality.” The joint venture was pegged at US$19.5 billion (also cited as S$16 billion in one report). The plan was to set up semiconductor and display production plants in Gujarat, Prime Minister Narendra Modi’s home state. Vedanta and Foxconn had first announced the joint venture to manufacture chips and display panels in India in February 2022. The project also made them among early private participants in the government-backed India Semiconductor Mission. The decision to unwind the partnership is a setback for a flagship narrative around quick progress in domestic chipmaking.

What may have triggered the exit

Foxconn’s statement did not spell out reasons for the withdrawal. But a source familiar with the matter told Reuters that concerns about incentive approval delays by India’s government contributed to Foxconn’s decision. The same source said New Delhi had raised several questions on the cost estimates provided as part of the incentive request. Separately, another report said the venture struggled to get a technology partner to make chips used in products ranging from mobile phones to refrigerators and cars. It also noted that European chipmaker STMicroelectronics was being roped in as a technology partner, but talks were deadlocked. These details point to execution risks that can slow projects even after high-level announcements.

Vedanta’s response and the ownership change

Vedanta’s public response on Monday stressed continuity rather than retreat. A spokesperson said the company is fully committed to the semiconductor fab project and has secured alternative partners to establish India’s first foundry. The corporate structure also changed shortly before the withdrawal became public. Vedanta said its board approved the acquisition of 100% ownership of Vedanta Foxconn Semiconductors Private Limited and Vedanta Displays, both wholly owned subsidiaries of Twin Star Technologies Limited. Another report described an ownership shuffle in which Vedanta Ltd took over the stake of Twin Star Technologies Limited, a subsidiary of Vedanta’s ultimate holding company. After Foxconn’s exit, Foxconn said it is working to remove its name from the entity that is now fully owned by Vedanta.

Government: “No impact” on India Semiconductor Mission

India’s electronics and IT minister Ashwini Vaishnaw told The Economic Times that both companies remain committed to developing the semiconductor industry and supporting Make in India, and that the development has no impact on the Indian Semiconductor Mission. Minister of State for Electronics and IT Rajeev Chandrasekhar echoed that view. He said Foxconn’s decision has “no impact” on India’s semiconductor fabrication plant goal and reiterated that both companies are “valued investors” in the country. In a post on X, Chandrasekhar added that it is not for the government to get into why two private companies choose to partner or not, and that both firms can now pursue strategies in India independently with appropriate technology partners.

How Vedanta’s stock moved after the news

The market reaction was immediate, with Vedanta shares tracking lower across sessions referenced in the reports. At 10.42 pm, the scrip was trading 1.25% lower at Rs 279 on the BSE in one update. Another report said the stock opened at Rs 275 on Tuesday versus a previous close of Rs 282.25 and slipped to Rs 274.90, down about 2.6% in early trade. By the end of Tuesday’s session, it settled 1.67% lower at Rs 277.55 on the BSE and 1.59% lower at Rs 277.75 on the NSE, according to the cited figures. Trading volumes were also reported: about 6.66 lakh shares on the BSE and over 1.36 crore shares on the NSE during the day. On performance metrics, reports said Vedanta was down 11% to 12% year-to-date, while up about 21% over the last one year; the BSE Metal index was down 1.58% year-to-date in one comparison.

Technical levels and the near-term trading setup

Market participants also focused on technical levels following the headline risk. Gaurav Bissa, VP at InCred Equities, said Vedanta has been in a consolidation phase since March 2023. He flagged hurdles near Rs 295 and support around Rs 260. Bissa also noted that the stock is trading below the 200-EMA on daily charts, which has contributed to pressure on rallies in recent weeks. At the same time, he said it trades comfortably above the 200-EMA on weekly charts. His near-term view, as cited, was that the stock could continue in the 260-295 range, and unless there is a breakout or breakdown, short-term trading should be avoided.

Other disclosures and regulatory context

The Reuters report also referenced S&P Global Ratings, which said Vedanta’s planned semiconductor business does not increase immediate liquidity pressure. S&P added it believes there is no immediate sizable funding commitment for the semiconductor project, pending government approval. Separately, the Securities and Exchange Board of India (SEBI) was reported to have imposed a 3 million rupee (Rs 30 lakh) fine on Vedanta for disclosure requirement violations regarding the Foxconn venture nearly two weeks before the Reuters update. These points kept investor attention on governance, approvals and funding visibility, alongside the operational question of who provides the core chipmaking technology.

Key facts at a glance

Why the development matters for India’s chip plans

The end of a marquee joint venture highlights a repeated challenge in semiconductor projects: aligning incentives, cost assumptions, approvals and a credible technology partner in one package. While the government has said the Foxconn-Vedanta split does not change India’s semiconductor mission goals, private execution remains central to moving from policy intent to operational fabs. The reports indicate that incentive approval timelines and questions on project cost estimates may have weighed on the venture’s progress. They also point to the importance of a confirmed technology partner, with STMicroelectronics talks described as deadlocked in one account. For Vedanta, the next milestones will likely revolve around partner clarity, the structure of the now fully owned entity, and how quickly it can present an appraised proposal that satisfies government processes.

Conclusion

Foxconn’s exit from the US$19.5 billion semiconductor joint venture has pushed Vedanta back into the spotlight, both for its near-term stock reaction and for the credibility of its chipmaking roadmap. Vedanta says it has alternative partners and remains committed to building India’s first foundry, while the government has reiterated that the move does not alter national fab goals. The next signals for investors will come from formal updates on technology partnerships, incentive approvals and how the fully Vedanta-owned entity is repositioned after Foxconn removes its name.