Murugappa Group company CG Power eyes semiconductor assembly business

CHENNAI: The shares of Murugappa Group company CG Power surged almost 20% in trade to Rs. 469 on Wednesday following announcement of its plans to get into semiconductor assembly.

Mumbai-based CG Power and Industrial Solutions, which was acquired by Tube Investments in 2020, has filed an application to set up an outsourced semiconductor assembly and test facility (OSAT) in India with an investment of about $791 million (Rs 6,600 crore). spread over five years, the company said on Wednesday.

In a disclosure to the exchanges the company said that it has sought the approvals of the ministry of electronics and information technology (MeiTY) to set up a OSAT facility and is also seeking subsidies for the project.

"The estimated investment on the project over a period of five years is $791 million and the same is expected to be funded by a combination of subsidy, JV Partners equity contribution and debt, as required," the company said.

The project relates to setting up of semiconductor assembly, testing, marking and packaging (ATMP)/ outsourced semiconductor assembly and test (OSAT) units in India. Subject to approvals, the company also proposes to implement the same as a joint venture in partnership with technology providers, which are under discussion.

Murugappa Group declined to comment on TOI's queries around details of the project, location of the facility or reasons for getting into a new non-core segment. The engineering conglomerate currently deals in products, solutions and services for power, industrial and logistics sectors.

In 2020, Murugappa Group's Tube Investments (TII) acquired a controlling stake in debt-ridden CG Power, and the takeover followed lenders of CG Power agreeing to a one-time loan restructuring. As of September, Tube Investments
holds 58% shareholding.


Ready to Master Stock Valuation? ET’s Workshop is just around the corner!