After ignoring Maharashtra, Vedanta's Anil Agarwal struggling to get financing for Rs 1.54 lakh crore chip unit in Gujarat

Vedanta chairman Anil Agarwal is struggling to find financial backers for a planned semiconductor factory in Gujarat with an investment of as much as Rs 1.54 lakh crore, said a report.

Agarwal’s representatives met with large funds from West Asia, Singapore, and the US, all of whom gave the opportunity a pass, reported Bloomberg on Wednesday quoting people familiar with the matter.

A joint venture of the Indian conglomerate and Taiwanese electronics manufacturing giant Foxconn signed a Memorandum of Understanding with the Gujarat government in September to set up a semiconductor and display manufacturing unit in the state.

Vedanta-Foxconn would invest Rs 1.54 lakh crore to set up the facility in Gujarat, which would create one lakh job opportunities, Chief Minister Bhupendra Patel had said after the MoU was signed in the presence of IT Minister Ashwini Vaishnaw, at a function in Gandhinagar.

Prime Minister Narendra Modi in a tweet had said this MoU is an important step in accelerating India's semiconductor manufacturing ambition. "This MoU is an important step accelerating India's semi-conductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact to boost economy and jobs. This will also create a huge ecosystem for ancillary industries and help our MSMEs," Modi had tweeted.

“History gets made! Happy to announce that the new Vedanta-Foxconn semiconductor plant will be set up in #Gujarat. Vedanta’s landmark investment of Rs 1.54 lakh crores will help make India’s #Atmanirbhar Silicon Valley a reality,” billionaire Agarwal had said in a series of tweets. “My deep gratitude to the Gujarat Govt and the Union IT Minister, who have helped Vedanta tie things up so quickly. India’s tech ecosystem will thrive, with every state benefiting via the new electronics manufacturing hubs.”

India’s own Silicon Valley is a step closer now, the Vedanta Chairman tweeted. “India will fulfil the digital needs of not just her people, but also those from across the seas. The journey from being a Chip Taker to a Chip Maker has officially begun…Jai Hind!,” he tweeted.

The investors to whom Agarwal pitched the plan raised concerns about the group’s limited experience in the sector, and its stretched financial situation, reported Bloomberg.

A spokesperson of Volcan Investments Ltd., the family trust of Agarwal, told Bloomberg that the company is not looking for any external investors to finance the semiconductor and display project.

Initially, Anil Agarwal had said that Vedanta Ltd., his India unit, was making the chip plant investments. Later, he said that the manufacturing business would fall within the purview of Volcan.Agarwal’s chip-making venture in Gujarat hopes for an initial investment of $2 billion for the plant that is expected to be set up in two years. The Indian government is also offering to bear half the costs for such projects under a production incentive plan, added the Bloomberg report.