On Wednesday, the Chennai-based Murugappa Group declared that it would enter the semiconductor assembly and testing industry, committing $791 million over the course of five years. The company CG Power and Industrial Solutions, founded by Crompton Greaves and taken over by the Murugappas in November 2020, would mark the group’s entry into the semiconductor industry.
Following the group’s statement, the value of CG Power’s shares increased by over 20%, reaching INR 469.
Seeking subsidies for a “outsourced semiconductor assembly and testing” (OSAT) plant in India, the INR 7,000-crore business has submitted a proposal to the Union Ministry of Electronics and Information Technology (MeiTY).
According to the statement, the project would reportedly be financed by the group using a combination of loans, equity contributions, joint venture partners, and subsidies. A cooperative venture with technology suppliers is being discussed.
Born in the 1940s, the INR 75,000-crore Murugappa group is involved in financial services, sugar, abrasives, tubes and cycles, fertilizers and chemicals, and sugar. The younger generation has been leading the group in recent years, and it appears that they are shifting their focus from adjacent markets to new opportunities. They have invested in a variety of businesses, including e-mobility, phase-changing chemicals, drones, mobile phone cameras, and online payment gateway services.
Entering the semiconductor industry, the Group has made a strategic investment in India’s technological future, in addition to a business decision.
