Cyient incorporate new subsidiary for semiconductor business; stock rise nearly 4%

In a stock exchange notification issued after market hours on Friday, Cyient said that it has incorporated a wholly-owned subsidiary named ‘Cyient Semiconductors Pvt. Ltd’ under the provisions of the Companies Act, 2013. The new subsidiary aims to expand the company’s capabilities in application-specific integrated circuit (ASIC) turnkey design and manufacturing under its semiconductor business.

After the announcement, Cyient shares gained as much as 3.8% on Monday to hit an intraday high of ₹2,034.85 on the NSE. However, the stock pared early gains to close 1.67% higher at ₹1,992 apiece on the NSE.

The stock has climbed nearly 11% in the past one month, but is still down 14% year-to-date. The IT stock gained 25% in the past one year but dropped more than 4% in the last 6 months.

Last month, Cyient announced the expansion of its semiconductor business. In a press release, Cyient’s vice chairman and managing director, Krishna Bodanapu, said, “We are happy to announce this strategic initiative that enhances our capabilities in application-specific integrated circuit (ASIC) turnkey design and manufacturing.”

“As the global semiconductor market is expected to hit a trillion dollars by 2030 and the Indian Electronics and Semiconductor Association (IESA) forecasting the industry's growth to $100 billion by 2030, we are well-positioned to capitalize on the vast opportunities for growth and influence in this evolving market,” he added.

Cyient was also in the news last week after it offloaded a 14.5% stake, or 1.15 crore equity shares, in Cyient DLM Ltd through a block deal on August 21, 2024.

Cyient had then said that it intended to utilise the capital proceeds towards the company’s capital requirements, including but not limited to key investments in its semiconductor business to support its growth, various organic and inorganic investments.