Cairn Energy India has set a price band of Rs 160 - Rs 190 for its initial public offer of 32.88 crore shares of the company. Based on this price range, Cairn is expected to raise between Rs 8,616 crore ($ 1.93 billion) and Rs 9947 crore ($ 2.23 billion) including the proceeds of a Rs 3700 crore pre-IPO private placing.Of this Cairn India will retain Rs 2682 crore ($ 600 million) with Cairn Plc receiving between Rs 5934 crore ($ 1.33 billion) and Rs 7265 billion ($ 1.63 billion). Cairn Energy Plc, the UK based parent company is diluting 30.5% of its stake in the Indian operations. Around 90% of Cairn's assets are in its Indian operations. Cairn Plc will continue to hold a 69.5% in Cairn India following the flotation.This implies a market capitalisation between Rs 28,245 crore ($ 6.32 bn) and Rs 33,541 crore ($7.50 bn) for Cairn, excluding the green shoe option. The implied valuation for Cairn's Indian operations is between $5.72 billion and $6.90 billion, after taking into account the part of the proceeds to be retained by Cairn India (approximately $600 million), a company release said.Last week the British oil major placed shares worth $822 million or Rs 3700 crore in a pre-IPO placement of shares in its Indian operations, Cairn Energy India. The bulk of the shares were picked by the state-owned Malaysian oil company, Petronas. Petronas bought 176.5 million shares, around 10 per cent of the expected IPO at Rs 176.48 per share. The balance of 33.14 million shares are being subscribed to by Indian and international institutional investors including Videocon picked up shares worth $ 25 million.The final offer price will be determined following a book building exercise expected to complete in mid December 2006, the release added. ABN AMRO Rothschild, Merrill Lynch and Morgan Stanley are the book running lead managers to the issue.
