Cairn raises Rs 3,700 cr in pre-IPO sale

Petronas of Malaysia has picked up about 10 per cent stake in Cairn India Ltd, the subsidiary of Scottish oil firm Cairn Energy Plc, that is to be listed on Bombay Stock Exchange by the end of next month.

Petroliam Nasional Berhad (Petronas) subscribed to 176.53 million shares of CIL in a pre-IPO private placement, Cairn said in a statement.

"The pre-flotation private placing closed on November 22 and 209.67 million Cairn India shares have been placed at a price of Rs 176.48 per share, raising a total of Rs 3,700 crore ($822.47 million)," it said.

The largest investor in the placing was a wholly-owned subsidiary of Petronas, which has subscribed for 176.53 million shares (representing approximately 10 per cent of the post-flotation share capital).

The balance of 33.14 million shares are being subscribed for by a combination of Indian and international institutional investors including Videocon.

As a result of the private placement, the net offer to the public of shares in Cairn India would be reduced from 538.47 million shares to 328.80 million shares. Cairn had originally planned to raise at least $1.8 billion through sale of 538.47 million shares of CIL through the proposed initial public offering.

Cairn Energy Plc chief executive Bill Gammell said, "We are delighted to have gained such substantial backing for our pre-flotation placing. The positive response confirms our belief that this is the best strategy for Cairn to develop and grow our world class business in India."

Cairn said if the flotation price per share is lower than Rs 176.48, the placing price would be reduced accordingly.

"The placing is equivalent to 11.88 per cent of the issued share capital of Cairn India and, at the placing price, implies a Cairn India market capitalisation of approximately Rs 31,154 crore ($6.92 billion)," the release added.