At the meeting, LIC officials told the Cairn India officials that they have some concerns over valuation and debt situation of the entity after merger, a senior official from the insurance behemoth told PTI.
LIC owns 9.06 per cent in Cairn India, second only to 9.82 per cent of UK's Cairn Energy plc. LIC also has a minority 1.77 per cent holding in Vedanta. The merger needs approval of at least half of the minority shareholders.
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Minority shareholders of Cairn, who have seen share prices almost halve to Rs 170-180 in the past one year on back of the company cutting exploration expense and falling oil prices, have criticised the offer of one Vedanta share and one 7.5 per cent preference share in Vedanta for every share they hold.
Cairn India has Rs 16,867 crore of cash on its books, while Vedanta has debt of Rs 37,636 crore. This has led to concern among minority shareholders about the cash that will become part of the new entity.
At the meeting, took place at LIC's corporate head office here, the Cairn India team is learnt to have apprised of the advantages of the merger to LIC.
"A team of senior Cairn officials called on senior officials of LIC here on Tuesday to explain how the Cairn's merger with Vedanta will be good for the company," an LIC official said, requesting anonymity.
"We have not looked into the valuation of the Vedanta offer as of now. After the Cairn officials' visit to our office, the company will be sending the full document about the merger deal to us. Then only can we have a look at the issue," another official of LIC told PTI.
"We are asking some more details from Vedanta. We had undertaken some due-diligence when Vedanta picked up majority stakes in Cairn. We have fair amount of idea how both the companies have been operating," LIC officials said.
There are three different wings within the investment department at LIC, including monitoring and account, risk management and research.
"Once all these departments satisfy about various aspects of the proposed deals, we will inform the company about our decision before the AGM (annual general meeting)," officials at LIC said.
Cairn India's annual general meeting will be held on July 21, where the shareholders will get a chance to voice their say on the merger and vote on it.
Anil Agarwal-promoted Vedanta on Sunday said it would merge its subsidiary Cairn India with itself for larger natural resources entity.
As part of the deal, each Cairn India shareholder will be offered an equity share of Vedanta, besides a 7.5 per cent redeemable preference share having a face value of Rs 10.
The deal requires 75 per cent of minority shareholders (by value) to vote in favour for the transaction to go through.
After the merger, Cairn India minority shareholders will hold 20.2 per cent stake in the merged entity, while Vedanta's minority shareholders will own 29.7 per cent.
The Cairn share price closed at Rs 182.40 on the Bombay Stock Exchange on Tuesday.
Apart from LIC, UK's Cairn Energy hold 9.82 per cent stake in Cairn India. Cairn Energy had in 2011 sold majority stake in Cairn India to Vedanta for $8.67 billion.