Semiconductor foray adds $3bn to Murugappa Group's market value
Murugappa Group added $3 billion (approximately Rs. 25,000 crore) in market value on Wednesday after one of the conglomerate's units announced its intentions to enter the semiconductor assembly industry, reported Bloomberg. CG Power and Industrial Solutions Ltd has submitted an application to the Ministry of Electronics and Information Technology (MeitY) for approval to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in India.
CG Power stock reaches all-time high
On Wednesday, shares of CG Power surged by 20% to an all-time high of Rs. 469.35 apiece on NSE. The relative strength index (RSI) for CG Power is 48.9, signifying that the stock is neither overbought nor oversold. The one-year beta for CG Power stock is 0.1, indicating low volatility during that time. The shares are higher than the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.
Subsidy application and joint venture
CG Power has also requested a subsidy grant for the project. The company plans to execute the project as a joint venture with technology providers/anchor customers, which are currently under negotiation. The project's estimated investment is $791 million (Rs. 6,591 crore), which will be distributed over five years. The investment is expected to be funded by a combination of subsidy, JV partners equity contribution and debt, as required.
Tube Investments holds a 58% stake in CG Power
CG Power specializes in providing comprehensive solutions for managing and applying electrical energy to utilities, industries, and consumers. The company operates through two segments: Power Systems and Industrial Systems. In 2020, Murugappa Group's Tube Investments acquired a controlling stake in debt-ridden CG Power after lenders agreed to a one-time loan restructuring. As of September, Tube Investments holds a 58% shareholding in the company. Tube Investment's shares settled 16.72% higher on NSE, at Rs. 3,730.35 apiece on Wednesday.
