Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Cairn India, a crude oil and natural gas exploration and production company, is entering the capital market with a public issue of 32,87,99,675 equity shares of Rs 10 for cash at a premium to be decided through a 100% book-building process.

The construction and development work for Rajasthan is partly being funded by the proposed IPO. The price band for the issue has been fixed between Rs 160 and Rs 190 per share; issue opens on December 11 and closes on December 15.

Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Experts said apply.

Experts/Company	Poll Result	Experts view
R S Iyer (KR Choksey)	Apply	Cairn India is an excellent issue. Investors should subscribe with a long term view.
Manish Bhatt (Prabhudas Lilladher)	Apply	Investors should subscribe at higher price band with a long term view. Cairn India is an excellent issue.
SP Tulsian (Investment Advisor)	Apply	Cairn India is an average issue. Investors can subscribe with a long term view.

 

 

 

 

 

 

 

Gross proceeds from the IPO would help Cairn India raise a minimum of Rs 86.16 billion at the lower end of the price band and a maximum of Rs 99.47 billion at the upper end of the band.

Out of the total offer, the company has completed a pre-IPO placement of 209.67 million equity shares, thus the net offer to public would stand reduced to 328.80 million equity shares along with greenshoe option.

Out of the offer to public, the company proposes to reserve 60% for allotment to qualified institutional bidders, of which 5% will be reserved for allotment to mutual funds. Further, 10% is being reserved for allotment to non-institutional investors and the balance 30% will be made available for allotment to retail investors on a proportionate basis.

Cairn India is a newly incorporated Indian company and has been promoted by Cairn Energy PLC, a crude oil and natural gas exploration and production company trading on the main market of the London Stock Exchange. The newly incorporated company, Cairn India, will acquire the subsidiaries which hold all of the ownership and operated interests in Cairn Energy PLC's Indian crude oil and natural gas development and production assets and the majority of its Indian crude oil and natural gas exploration assets.

Cairn India has been exploring and operating development and production assets in India for over 12 years in partnership with the Government of India, state governments, regulators and key industry participants such as ONGC.

Cairn India's unique position in India and the importance of its development in Rajasthan to the Government of India and relevant state governments of India is reflected by the estimation that Cairn India will operate approximately 20% of India's oil production by 2010, assuming Indian production remains at current levels and production from the Rajasthan Block's Northern Fields fulfils its target production rate of approximately 150,000 bopd.

Objects of the Issue

From the funds raised through the issue, Cairn India plans to pay Cairn Energy PLC for acquiring shares of Cairn India Holdings; 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 Round VI.

DSP Merrill Lynch and ABN Amro Securities India are acting as global coordinators and book running lead managers to the issue along with book running lead manager JM Morgan Stanley.