Erasing its early gains, shares of Cairn India fell over 4 per cent on profit booking, shortly after the UK-based Cairn Energy said it would sell 51 per cent stake in Cairn India to Vedanta Resources for $8.48 billion.
Cairn India plunged 4.69 per cent to a low of Rs 338.75 in the mid-session on the Bombay Stock Exchange.
However, the scrip had hit a 52-week high in the morning trade and up over 3 per cent to a high of Rs 368.
"The fall in the scrip can be attributed to profit-booking as investors preferred to exit the stock soon after the deal between Cairn India and Vedanta was announced," CNI Research CMD Kishore P Ostwal said.
On the National Stock Exchange, the scrip of oil explorer was quoting at Rs 337.70, down by nearly 5 per cent. In terms of volume, a total of over 3 crore shares of the company changed hands on the two bourses.
Vedanta is buying a majority stake in Cairn India, the company that discovered the nation's largest onland oil field in Rajasthan, at Rs 405 per share, a premium of about 32 per cent to the India-listed firms's average closing price for 90 days prior to August 14, Cairn Energy said.
Cairn Energy holds 62.36 per cent stake in Cairn India. Meanwhile, Vedanta promoted Sesa Goa also declined by nearly 5 per cent and was trading at Rs 337.40 on the BSE.