Cairn Energy fixes issue price at Rs160-190 a share

Mumbai: Cairn Energy has set a Rs160-190 price band for floatation of its Indian operations, valuing the business at between Rs28,245 crore and Rs33,541 crore ($6.34 billion and $7.53 billion), the oil explorer said in a statement.

Last week Cairn Energy sold around 12 per cent of the Indian operations, mainly to Malaysian state oil company Petronas, for a higher than expected Rs3,662 crore ($821 million).

Cairn said the strong demand for the private placing, which pushed its shares sharply higher, meant it could cut the number of shares it would sell in the public offering on Indian stock markets and still raise its target of $1.8 billion.

Around 328.8 million shares will be offered in the flotation, down from 538.5 million expected before last week's private placing of around 209.7 million.

Cairn will have a 69.5 per cent holding in Cairn India following the flotation, but analysts expect the company to reduce this over time.

Cairn, has about 90 per cent of its value tied up in its Indian assets.

"Following last week's successful private placing we are now commencing the next stage of the proposed flotation of the Cairn India business," Cairn Energy chief executive Bill Gammell said in a statement.

"The price range for the flotation reflects not only the current Cairn share price, but also our belief in the long-term potential value of the Indian business which we have now seen positively supported by our private placing," he added.

Cairn is exiting its India fields because they are in the development phase and the company wants to refocus on exploration.