Mumbai: Shares of Cairn India on Tuesday fell by 4.5 percent amid reports that the metals and mining giant Vedanta is considering merging the company with itself.
After falling 5.56 percent to Rs 170.60 -- its 52-week low in intra-day trade, shares of Cairn India finally ended at Rs 172.60, down 4.46 percent on the BSE.
At the NSE, the stock closed the day with a loss of 4.34 percent at Rs 173.
Shares of Vedanta however rose 3.11 percent to end at Rs 182.55 on the BSE.
"Cairn India was down by 5.5 percent and Vedanta was up more than 4 percent intra-day after market rumours suggested that metal giant Vedanta is in talks of merging Cairn India with itself," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
According to media reports, Vedanta is in final stages to announce merger of Cairn India, a listed oil and gas explorer, with itself.
Meanwhile, Vedanta today said its strategy is to "simplify and consolidate" its corporate structure, amid speculations of Cairn India merging with the company.
Anil Agarwal-led Vedanta recently hiked stake in its subsidiary Cairn India by nearly 5 percent.
"Company's stated strategy is to simplify and consolidate its corporate structure. Management reviews options to deliver this strategy on an on-going basis," Vedanta, formerly Sesa Sterlite, said in a BSE filing today.
Without giving specific details, Vedanta said it would "abide by its obligations to make appropriate disclosures as and when such disclosures are necessitated by decisions taken by the company".
Merging Cairn India with itself would provide Vedanta access to cash and help reduce the debt burden.
At the end of March, Vedanta had total liabilities worth over Rs 99,000 crore on a consolidated basis.
