Reliance Industries and software major HCL are independently “evaluating” deals to purchase a 30% equity stake each in the semiconductor wafer fab applicant ISMC Analog, multiple people aware of developments told ET, signalling heightened interest in India’s ambitious move to seed a semiconductor manufacturing ecosystem in the country.
The oil-to-telecom conglomerate as well as the Shiv Nadar-founded software group HCL are likely to invest through subsidiaries, said the sources who estimate the “total investment from both parties may be over Rs 4,000 crore ($500-600 million)”.
ISMC Analog, a consortium of Mumbai-based Next Orbit Ventures and Israeli tech company Tower Semiconductor, is one among three applicants vying for subsidies under the Centre’s Rs 76,000-crore SemiconIndia programme. It has chosen an electronics cluster near Mysuru in Karnataka, to build its $3-billion fab.
In response to ET’s queries, a spokesperson for Reliance said the company “evaluates opportunities on an ongoing basis”, but declined to comment on “market speculation and rumours”.
“We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges,” the person stated.
HCL Tech did not respond to queries as of press time.
ISMC said it “cannot endorse or disclose names of investors and their terms of investment” in view of certain non-disclosure agreements.
According to the current contours of the deal, ISMC Analog will “expand its board to include nominee directors to acknowledge the (new) investors”, according to one person aware of the details. Technology partner Tower Semiconductor will continue to own 15% in the venture, the person said.
Term sheets for both proposed deals have been signed recently, according to the people cited above.
ET was not able to independently verify when the parties signed term sheets.
A term sheet is not an enforceable contract between two parties but a "non-binding" expression of interest with details about commercial terms. On completion of due diligence, the deal will move towards definitive agreements.
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