The Hindu Business Line : Cairn India shares list at discount

DULL DEBUT: (From right) Mr Rahul Dhir, CEO, Cairn India Ltd, with Mr V. K. Bansal, Managing Director, JM Morgan Stanley Pvt. Ltd, and Mr Lawrence Syth, Chief Operating Officer, Cairn India, during the listing of the company's shares on the National Stock Exchange on Tuesday. — Paul Noronha

Mumbai , Jan. 9

Shares of Cairn India Ltd, a subsidiary of the Edinburgh-based Cairn Energy Plc, which was listed on the BSE on Tuesday, closed 14 per cent below the initial public offer price of Rs 160 due to the unenthusiastic response to the issue, concerns about the quality and evacuation of the company's crude and falling global crude prices.

The stock opened at Rs 140, touched an intra-day high of Rs 155 and a low of Rs 128.65, only to close at Rs 137.50. A total of 3.26 crore shares were traded on the first day of listing.

Traders feel that it could take some days or even weeks before the share price stabilises. Mr Arun Kejriwal, Director, Kejriwal Research and Investor Services, said that trading of shares at the discount of 12-15 per cent below issue price was on account of the lukewarm response to Cairn's IPO which opened in December 2006.

The IPO, which was at a price band of Rs 160-90 per share, fetched a final price of Rs 160 per share. It was subscribed 1.3 times.

The trading volumes on the debut day were due to more investors wanting to sell the shares in the market, said Mr Kejriwal.

Cairn India opened at Rs 142 on the NSE closed at Rs 137.40. Cairn India's Chief Executive Officer, Mr Rahul Dhir, said the company is confident of meeting production targets by 2009 and is in discussions with the Union Government and ONGC for evacuation of crude.