Shares of Larsen & Toubro surged as much as 2.69% on Friday to hit a 52-week high of ₹3,195.50 apiece on the BSE, a day after the company announced its foray into chip design and manufacturing through new venture L&T Semiconductor Technologies Limited (LTST).

The scrip opened higher at ₹3,125, up 0.43% as against the previous closing price of ₹3,125.05. At 1:30 pm, the share price of the company was trading 2.30% higher at ₹3,183.25. The company’s market capitalisation stood at more than ₹4.47 lakh crore with more than 1.34 shares exchanging hands as against the two-week average of 0.65 lakh shares. The company hit a 52-week low of ₹2,050.25 on December 23 last year.

In the past six months, the counter has given 8.12% in returns. In the year-to-date period, the company's stock has given 10.35% in return.

According to the company, L&T Semiconductor Technologies Limited is formed for the purpose of engaging in the business of fables semiconductor chip design and product ownership. L&T subscribed 100% of the share capital of LTST amounting to ₹5,00,000.

The development comes as several domestic and international players have already committed multi-million dollar investments in India for chip design and manufacturing. Last month, CG Power and Industrial Solutions Ltd filed an application with the Ministry of Electronics and Information Technology (MeitY) seeking approval to set up an outsourced semiconductor assembly and test (OSAT) facility, with an investment of $791 million over a period of five years.

In July, the US-based chipmaker AMD committed an investment of around $400 million in India in the next five years for setting up of research and development facility in Bengaluru. Through these investments, AMD will drive its semiconductor design innovation and support the government’s Semiconductor Mission. Notably, Micron Technology, which is one of the world’s largest semiconductor companies also announced its plans to set up a new a new assembly and testing facility in Gujarat with an investment of up to $825 million.

According to a report by Counterpoint Research, the domestic semiconductor component market will rise manifold to touch the total revenue worth $300 billion during 2021-2026. The domestic semiconductor market is expected to grow at a CAGR of 19% from 2021 to 2026.

Prime Minister Narendra Modi, in August this year, said the country is working on a "vibrant semiconductor" ecosystem with full-force. "India fully understands its global responsibilities and is working on a comprehensive roadmap in the field of chips with allies," said Modi while accentuating on the need for a reliable global supply chain for semiconductors.

Larsen & Toubro stocks

L&T shares hit 52-week high as company forays into chip design