Cairn India will bear approximately 70 per cent of this cost while the remainder will be borne by ONGC which has a 30 per cent share in the oilfields. Cairn should be able to leverage the oil production from its Rajasthan oil fields in the second half of CY 09.
To fund the development, Cairn has already mopped up about Rs 2,534 crore from Petronas and Orient Global Tamarind Fund, at Rs 224.30 per share. The firm had a net cash position of Rs. 1,377 crore at the end of Q1 CY 08.
Meanwhile, much would depend on the direction of global crude prices though they are expected to remain strong over the next few quarters. If that is the case, it would provide the company with the necessary growth momentum.
At Rs 300, the stock trades at just a shade below its 52-week high of Rs 307.8, which was hit on May 13. The stock should remain an outperformer going forward.
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