Shares of Cairn India ended with nearly 4 per cent gains today as private miner Vedanta Ltd merged the oil firm with itself in a USD 2.3-billion all-share deal to create India's largest diversified natural resources firm.
The stock settled at Rs 187.60, up 3.79 per cent, on BSE. During the day, it surged 4.48 per cent to Rs 188.85.
On NSE, Cairn India rose 3.84 per cent to end at Rs 187.70.
Vedanta, however, gave up all its early gains and closed 1.49 per cent lower at Rs 181.25 on BSE.
"The merger will help in optimising the capital structure of the group and reducing cost of funding. In our view, the merger is a win-win for the shareholders of both Vedanta and Cairn," brokerage Motilal Oswal Securities said in a report.
The move by Vedanta Ltd, India's largest private miner headed by billionaire Anil Agarwal, is an attempt to cut down its debt load.
Shareholders of Cairn India, the country's top private oil producer, will get one ordinary share and 7.5 per cent redeemable preference share of Vedanta Ltd with a face value of Rs 10.
That implies a premium of 7.3 per cent to Cairn's Friday closing price.
Post-merger, the London-listed parent Vedanta Resources' holding in Vedanta Ltd will drop to 50.1 per cent from the current 62.9 per cent.
Meanwhile, the BSE Sensex ended the day at 26,586.55, up 161.25 points.
