Cairn Energy Plc announced the new deal after market hours on Monday, 27 June 2011.

Meanwhile, the BSE Sensex was up 26.64 points, or 0.14%, to 18,439.05.

On BSE, 1.45 lakh shares were traded in the counter compared with average volume of 2.17 lakh shares over the past two weeks.

The stock hit a high of Rs 309 and a low of Rs 302.40 so far during the day.

Vedanta and Cairn Energy have agreed to remove a non-compete provision and related non-compete fee of Rs 50 per share on the deal, which will reduce Vedanta's total payment for a 40% stake in Cairn India to $6.02 billion from $6.65 billion.

The deal will be carried out in two tranches. Vedanta will buy a 10% stake in Cairn India on or before 11 July 2011 and purchase the remaining 30% stake at a later stage, pending necessary consents and approvals from the government of India. The first tranche purchase will increase Vedanta's stake in Cairn India to 28.5% and reduce Cairn Energy's stake to 52.2%.

Anil Agarwal, chairman of Vedanta, said the company "believes this initial 10% purchase is a further demonstration of its commitment to India. We look forward to the successful completion of the proposed transaction." Bill Gammell, CEO of Cairn Energy said "Cairn is pleased to have secured this adjustment to the agreement with Vedanta. Cairn continues to believe the necessary approvals to complete the Vedanta transaction will be received and is working with the Government of India in a positive and constructive manner."

A panel of Indian ministers has recommended that the cabinet committee on economic affairs approve the Cairn-Vedanta deal, provided Cairn India agrees on an even sharing of the royalty on production from the Rajasthan block and withdraw arbitration proceedings on tax payments. State-run ONGC, which owns a 30% stake in the oil field but pays the entire royalty on production, maintains the royalty should be added to the project cost and recovered from oil sales even though Cairn India says ONGC has to bear the royalty burden as per the production sharing contract.

On consolidated basis, Cairn India's net profit galloped 902.4% to Rs 2457.79 crore on 427.5% surge in net sales to Rs 3654.47 crore in Q4 March 2011 over Q4 March 2010.