Cairn is a safe buy: Rajesh Jain

Rajesh Jain, Market Strategist in an interview with ET Now talks about Cairn India.

What about Cairn? Would it react to numbers at all or would it essentially hover around what the deal and what the open offer essentially pans out?

Cairn can give you a positive surprise on two accounts. We already have reports that the Mangala reserves as well as the Mangala output per day is in excess of the original projections, so that is one upside.

The second has been because the crude from Cairns Rajasthan oilfields is more viscous. It tends to go at discount to the Brent. Now we had typically seen realisations being lower by as much as $10-12-15 and if Cairn is able to get a better realisation out there, then you have an upside.

In addition to that, there are 25 oilfields that they have tapped into and any statements as to the reserves that some of them may have can provide a trigger to the counter but broadly Cairn is a 90% play on the Rajasthan oilfield exploitation and even for retail investors who wanted to get into the stock, they should use the Sterlite news, the Vedanta news only as the safety net because it gives you a 355 exit option as and when the open offer comes, plus 50 if you are luckier but otherwise on a core fundamental basis, Cairn is a safe buy and the results should be coming out with a positive surprise.