India chip designer MosChip's shares soar
BOMBAY, March 18 (Reuters) - MosChip Semiconductor Technology Ltd's shares soared the maximum 20 percent on Monday on news two foreign companies were buying stakes in the Indian chip designer and vendor.
The shares of the Hyderabad-based designer of application specific integrated chips (ASICs) rose to a high of 41.40 rupees on the Bombay Stock Exchange before easing to close at 40.85 rupees, up 18.4 percent on the day. Some 124,413 shares traded.
Singapore-based contract manufacturer Flextronics International Ltd and U.S.-based ESS Technology Inc, which makes microchips that power DVD players, are separately acquiring stakes in MosChip, The Economic Times, a leading Indian financial daily, reported on Monday.
The newspaper said Nasdaq-listed ESS Technologies (NasdaqNM:ESST - news) is buying a 9.16 percent stake, and Flextronics (NasdaqNM:FLEX - news) a 4.58 percent interest, in the Indian chip designer, both via a preferential issue of equity and warrants.
``Flextronics has dedicated fabrication facilities. For a company of our size, the strategic stake will help us get competitive volume discounting for our chips,'' the paper quoted MosChip's managing director Dayakar Reddy as saying.
MosChip, which specialises in designing chips for computer peripherals, data communications and consumer electronics equipment, has no chip manufacturing facility of its own.
MosChip designs and markets its chips and then gets the capital-intensive manufacturing done by outside suppliers. It raised about 26 million rupees ($533,880) through a public offering a year ago.
Two of its key founders are industry veterans and have worked for some leading chip companies in Silicon Valley.
When contacted by Reuters, Vivek Bhargava, MosChip's chief financial officer, confirmed that both Flextronics and ESS Technology were acquiring stakes in the start-up.
The Bombay Stock Exchange was informed in February, and the company's shareholders had also already been told, Reddy said.
(Additional reporting by Anshuman Daga in Bangalore)
(US$1 equals 48.7 Indian rupees) |
