Potential Vedanta-Cairn merger may improve efficiency, give balanced portfolio: Deven Choksey

In a chat with ET Now Deven Choksey, MD, KR Choksey Securities shares his view on the reports that Vedanta was looking to merge the subsidiary Cairn India with itself.

ET Now: Are you surprised by the news? Did you expect that there could eventually be a merger between Vedanta and Cairn purely by virtue of the kind of cash that Cairn is sitting on?

Deven Choksey: Logically and rationally, it makes sense to see all units coming under one roof.

It would probably reduce the complexity of inter-company transactions. If one group company has cash and another is in debt, the merger of operations would definitely help the group at large.

If you look at global giants who are operating in the same field, you will find that they too have mining assets on one side and crude assets on the other side.

From a perspective of looking at this particular business, over a longer period of time both the assets (crude and mining) will ultimately end up giving company a kind of a balanced portfolio.
If you consider that, then I would think that it would be a balanced decision that they would take eventually, if they do end up taking one. Certainly, we would remain relatively more positive on that particular aspect of possibility, if the company comes out with the merger announcement.