Chennai-based company Murugappa Group announced that it would get into semiconductor assembly and testing and would invest $791 million over 5 years in the business. The group’s foray into semiconductors would be through CG Power and Industrial Solutions, a company set up by Crompton Greaves, which Murugappa took over in November 2020. The announcement said that the group would fund the project through a combination of subsidies, JV partners, equity contributions, and debt. Discussions are on for a JV with technology providers.
The proposal came against India’s ambition to create a robust tech manufacturing industry through attracting Apple suppliers’ investments. The move also enables investors to tap into a sector that has earned trillions in stock value worldwide this year but remains a small part of India’s $3.7 trillion stock market.
Here are a few key facts:
Murugappa Group’s Market Value Increase:
The Murugappa Group added $3 billion to its market value following an announcement about entering the semiconductor sector.
Investment in the Semiconductor Sector:
The Group plans to invest $791 million over a five-year period in a semiconductor assembly and testing facility.
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Stock Surge for CG Power:
CG Power and Industrial Solutions Ltd., a Murugappa Group company, saw its shares surge 20% to a record high after the announcement.
Influence on Other Group Stocks:
The positive impact on CG Power’s stock extended to other companies within the group, with similar-sized rallies observed.
The Murugappa group, which started in the Burmese banking markets in the 1900s and now operates 29 businesses and is present in 40 countries, according to its website, plans to fund the investment via subsidies, debt, and equity contributions from partners, according to a statement from CG Power.
