Cairn India places Rs 2,535-cr equity

MUMBAI.: Oil exploration and production company Cairn India raised $625 million (Rs 2,534.60 crore) through a private placement.

The company has sold 5.97% of its equity to Malaysia���s state-owned oil firm Petronas and the Singapore-based private equity firm Orient Global Tamarind Fund. With this, Petronas will consolidate its stake in Cairn India to 12.7% from 9.93% that it acquired during the pre-IPO placement in 2006.

New Zealand-based billionaire Richard Chandler owns Orient Global Tamarind Fund, which bought 2.6% stake in the company for Rs 224.30 per share, the same price at which Petronas had agreed to buy the shares. This stake sale will reduce Cairn Energy���s stake in Cairn India to 65%. Cairn India chief executive Rahul Dhir said: ���The private placement will help the company meet its investment plans and provide greater financial and operational flexibility.���Meanwhile, Cairn India plans to invest $500 million to build a 600-km pipelinefrom its biggest fields in Rajasthan to coastal state of Gujarat. The pipeline is yet to be cleared by the ministry of petroleum.

The shares will be locked in for a period of one year from the date of allotment. Analysts say Petronas is paying a premium to increase its stake to secure access to crude as prices soar. The shares are being sold at 1.8% lower than Cairn India���s closing price on March 14, but they are 40% higher than the IPO price of Rs 160. Cairn India���s shares fell 6% or Rs 14 on BSE on Monday to close at Rs 214 in a weak market.