CG Power and Industrial Solutions Limited’s shares were up by 6.80 per cent after the company signed a joint venture agreement with Renesas Electronics Corporation, and Stars Microelectronics Public Co. Ltd to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in India. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the project under India’s semiconductor scheme.

Also read: CG Power’s net profit down 11% in the December quarter

The company informed, it aims to construct and operate a OSAT facility in Sanand, Gujarat, with a production capacity scaling up to 15 million units per day. The facility will manufacture products, legacy packages like QFN and QFP and advanced packages such as FC BGA and FC CSP, catering to industries such as automotive, consumer, industrial, and 5G.

CG will hold a majority stake of 92.3 per cent in the JV, while Renesas and Stars Microelectronics will hold approximately 6.8 per cent and 0.9 per cent equity respectively. The company reported, the agreement plans to invest ₹7,600 crore over a five-year period, with financing secured through a blend of subsidies, equity, and potential bank borrowings.

Hidetoshi Shibata, CEO of Renesas said, “India is a critical part of Renesas’ business. We value its innovative landscape and robust potential growth and are committed to accelerating our investment in India. By partnering with the Murugappa Group and Stars Microelectronics, we will bolster India’s semiconductor ecosystem and address the growing semiconductor demand for the customers worldwide.”

The shares were up by 6.80 per cent to ₹474.05 at 10.40 am on the BSE.