CapitalMarket.com - Cairn India flops on debut
Hot Pursuit Tuesday, January 09, 2007 09:54 Hrs IST

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Cairn India flops on debut

Cairn India was trading at Rs 137 on BSE in early trade, a discount of 14.3% over the IPO price of Rs 160.

After debuting at Rs 140, the scrip attained a high of Rs 155 and a low of Rs 135.20. As many as 4.7 lakh shares changed hands in the counter on BSE.

The company had priced the IPO at the lower end of the Rs 160 - Rs 190 price-band.

The company’s post-issue equity is a massive Rs 1765.31 crore, face value per share being Rs 10. The post-issue holding of Cairn Energy is 67.6%.

The post-issue, FII-holding in the company is 13.04%.

NSE has also added the stock to the futures & options (F&O) segment with a lot size of 1,250.

Cairn India's IPO, in December 2006, managed to scrape through. The IPO was embroiled in controversy just before the float with Oil and Natural Gas Corporation, Cairn's partner in Rajasthan, dragging the company to the market regulator, Securities and Exchange Board of India, complaining that its subsidiary, Mangalore Refinery and Petrochemicals (MRPL) did not bear the sole responsibility for ensuring midstream development (pipeline for the transport of crude oil).

MRPL is the government nominee for the offtake of crude oil from Rajasthan. Cairn India expects to resolve its row with MRPL in the next few months.

Cairn India (CIL) was incorporated on 21 August 2006 to consolidate Cairn Energy’s business and interests in India. In the first six months to June 2006, CIL’s gross production from existing oil assets Ravva, Lakshmi and Gauri was 87,500 barrels of oil equivalent per day (boepd). Of this, CIL had a working interest in 24,000 boepd. (22.5% working interest in Ravva field in Andhra Pradesh and 40% in Lakshmi and Gauri fields in Gujarat).

The company intends to utilize a major portion of the IPO proceeds to develop the Rajasthan block and for additional drilling in Ravva and Cambay (Gujarat) blocks.

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