Cairn India market capitalisation up Rs 2,850 cr; stock rises 5% on Vedanta deal

Shares of Cairn India rallied on the Bombay Stock Exchange on Friday and added a whopping Rs 2,850 crore to its market capitalisation after the government approved its deal with Vedanta.

The scrip opened on a weaker note but soon recovered and touched an intra-day high of Rs 327.95.

At the end of Friday's trading, the scrip was quoted at Rs 325.70, up 4.81 per cent and thereby added Rs 2,850 crore to its market valuations at Rs 61,953 crore, even as the broader market closed in the negative zone.

"The uptrend in the stock is because the deal hangover, which was there for the last 10 months, is finally over and the uncertainty and regularity hurdles are now all clear," Ashika Stock Brokers' Research Head Paras Bothra said adding that the cost based royalty issue has also been factored in.

Meanwhile, Vedanta is trading 0.05 per cent higher to 2,095 pence, in London trading on Friday.

The approval comes with the preconditions that Cairn or its successor has to treat royalty payments on Rajasthan oilfields as recoverable from oil sales.

Besides, Cairn India will have to withdraw the arbitration it has initiated disputing its liability to pay Rs 2,500 per tonne oil cess on its 70 per cent share in the field and the approval will be subject to ONGC and would also need the security clearance.