The Hindu : Business : Cairn public offer on Dec. 11

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Thursday, Nov 30, 2006
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Cairn public offer on Dec. 11

Staff Correspondent

To fund development in the Rajasthan block

— Photo: Paul Noronha

ENERGETIC PLANS: Rahul Dhir (right), Chief Executive Officer, with Lawrence Smyth, Chief Operating Officer, Cairn India, at a press conference in Mumbai on Wednesday.

MUMBAI: In one fo the largest initial public offerings (IPO) to hit the Indian market in recent times, Cairn India Ltd., the crude oil and natural gas exploration and production company, is entering the capital market with a public issue of 328.80 million equity shares of Rs. 10 each for cash at a premium to be decided through a 100 per cent book-building process.

The price band for the issue, which is open from December 11 to 15, has been fixed between Rs 160 and Rs 190 per share. The gross proceeds from the IPO would help Cairn India raise a minimum of Rs. 8,616 crore at the lower end of the price band and a maximum of Rs. 9,947 crore at the upper end of the band.

The company has completed a pre-IPO placement of 210 million equity shares. Out of the offer to the public, the company proposes to reserve 60 per cent for allotment to qualified institutional bidders, of which 5 per cent will be reserved for allotment to mutual funds.

Further, 10 per cent is being reserved for non-institutional investors and the balance 30 per cent will be made available for allotment to retail investors on a proportionate basis.

Cairn India is a newly incorporated Indian company, promoted by Cairn Energy Plc, which is trading on the main market of the London Stock Exchange.

From the funds raised through the issue, Cairn India plans to pay Cairn Energy for acquiring shares of Cairn India Holdings Ltd; fund development in the Rajasthan Block as also additional drilling in Ravva and Cambay fields plus finance new exploration and appraisal activities from additional exploration contracts that may be awarded in NELP (New Exploration Licensing Policy) Round VI.

According to Rahul Dhir, CEO, Cairn India, the company's gross investment in projects to date has been $1.8 billion.

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