Shardul Amarchand Mangaldas & Co. advises ISM and IFCI Limited on second ever fiscal support agreement for setting up semiconductor facilities in Gujarat

May 1, 2025

Shardul Amarchand Mangaldas & Co. advised India Semiconductor Mission (“ISM”) and IFCI Limited, in relation to negotiating and finalising the Fiscal Support Agreement with CG Semi Private Limited (“CG Semi”), a subsidiary of CG Power and Industrial Solutions Limited (“CG Power”), a Murugappa Group company, under the modified scheme of compound semiconductor assembly, testing, marketing and packaging (ATMP) and outsourced semiconductor assembly and test facilities (OSAT) India.

The fiscal support agreement was signed on 17 January 2025. The CG Semi transaction is valued at INR 7600 crore, of which ISM will provide 50% of the eligible capital expenditure as fiscal support, thereby, reflecting the Indian Government’s commitment to strengthening the domestic semiconductor ecosystem.

ISM entered into a fiscal support agreement with CG Semi and CG Power for an amount of INR 3501 crore for setting up of ATMP and OSAT facilities with wire bonding and flip chip technology, in Sanand, Gujarat. This unit for OSAT manufacturing is being set up with an investment of Rs. 7,584 crores in partnership with Renesas, which is a leading semiconductor company operating 12 semiconductor facilities and is an important player in microcontrollers, analog, power and system on chip products. SAM & Co. played a pivotal role in structuring the agreement, safeguarding the interests of the government and ensuring compliance with law and the scheme-guidelines.

The SAM & Co. transaction team was led by Anurag Dwivedi, Partner; Shruti Paras, Principal Associate; and Amogh Mittal, Associate.

CG Semi and CG Power were advised by Cyril Amarchand Mangaldas on the legal aspects.

Renesas Electronics America Inc. (“shareholder of CG Semi”) was advised by Khaitan and Co. on the legal aspects.