Mumbai: Shares of Cairn India ended with nearly 4 percent gains Monday following the decision to merge the oil firm with private miner Vedanta Ltd in a USD 2.3-billion deal.
The stock settled at Rs 187.60, up 3.79 percent, on BSE. During the day, it surged 4.48 percent to Rs 188.85.
On NSE, Cairn India rose 3.84 percent to end at Rs 187.70.
Vedanta, however, gave up all its early gains and closed 1.49 percent lower at Rs 181.25 on BSE.
"The merger will help in optimising the capital structure of the group and reducing cost of funding. In our view, the merger is a win-win for the shareholders of both Vedanta and Cairn," brokerage Motilal Oswal Securities said in a report.
The move would help Vedanta Ltd, promoted by billionaire Anil Agarwal, cut down its debt.
Shareholders of Cairn India, the country's top private oil producer, will get one ordinary share and 7.5 percent redeemable preference share of Vedanta Ltd with a face value of Rs 10.
That implies a premium of 7.3 percent to Cairn's Friday closing price.
Post-merger, the London-listed parent Vedanta Resources' holding in Vedanta Ltd will drop to 50.1 percent from the current 62.9 percent.
Meanwhile, the BSE Sensex ended the day at 26,586.55, up 161.25 points.
