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Vedanta Slips after Foxconn Pulls Out of Semiconductor JV

BENGALURU, July 11 (Reuters) - India's Vedanta fell over 2% on Tuesday, a day after Taiwan's Foxconn said it withdrew from a $19.5 billion semiconductor joint venture with the metals-to-oil conglomerate.

The companies partnered last year to set up semiconductor and display production plants in Gujarat state. Concerns about incentive approval delays by India's government had contributed to Foxconn's decision to pull out of the venture, a source familiar with the matter told Reuters on Monday.

Foxconn's withdrawal from the project deals a blow to Indian Prime Minister Narendra Modi's chipmaking plans in the country, which had become a top priority for India's economic strategy in pursuit of a "new era" in electronics manufacturing.

S&P Global Ratings said that Vedanta's planned semiconductor business does not increase immediate liquidity pressure, adding that it believes there is no immediate sizable funding commitment for the semiconductor project, pending government approval.

The Securities and Exchange Board of India (SEBI), the country's market regulator, had imposed a 3 million rupee($36,430.76) fine nearly two weeks ago on Vedanta for disclosure requirement violations regarding the Foxconn venture.

Shares of Vedanta fell as much as 2.6% to 275 rupees apiece, after having already fallen over 24% as of last close, since the partnership was announced in February last year.

($1 = 82.3480 Indian rupees)

Reporting by Varun Vyas in Bengaluru; Editing by Dhanya Ann Thoppil and Sonia Cheema

Source: Reuters

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