Why Kaynes Technologies shares surged over 10% in trade on Friday

Mysore-based engineering service provider Kaynes Technology shares rose as much as 14 per cent to hit an intraday high of Rs 2,122.85 after the company informed exchange post market hours on Thursday that it signed memorandum of understanding (MoU) with Karnataka Government.

"Kaynes Technology and the Karnataka Electronics, IT, and BT Department signed an MoU to drive innovation. Kaynes Technology's pivotal role positions it as the ESDM Semicon ecosystem's anchor in Mysuru and this MoU will help in putting Mysuru on the global map," the company said in a press release. 

Kaynes Technology's arm Kaynes Semicon Private Limited will lead the e-setup of a semiconductor Assembly and Testing facility and Kaynes Circuits India Private Limited will spearhead the establishment of a Printed Circuit Board (PCB) manufacturing plant for producing complex multi-layered boards.

“Kaynes will put Karnataka in the forefront of OSAT and PCB with an investment of Rs 3,750 crore which will help in creating 3,200 jobs by harnessing collective expertise, the partnership is primed to not only meet pressing demands but also position Karnataka as a hub for cutting-edge semiconductor manufacturing and cultivating a self-sustaining and self-reliant ecosystem,” the company added.

The agreement will prove to be a significant step towards development of semiconductor industry in the country, analysts said.

Last month, in order to develop semiconductor industry government last month said that the technology firms will be given 50 per cent financial assistance for setting up semiconductor manufacturing facility the country.

Speaking after inaugurating Semicon India 2023 conference in Gandhinagar, Prime Minister Narendra Modi said India is establishing an entire ecosystem for the semiconductor industry to grow in the country.

“We were offering incentives as part of the Semicon India programme. It has been increased, and now technology firms will get 50 per cent financial assistance to set up semiconductor manufacturing facilities in India,” Modi said.

The semiconductor industry will witness exponential growth in India, Modi said.

“A year ago, people used to ask why should they invest in the Indian semiconductor sector. Now they ask why not invest in India,” he added.

(With PTI inputs)