Jeu 28 Juil 2011 11:59
Brokerages mixed on Cairn-Vedanta ownership transfer
Published on Wed, Jul 27, 2011 at 22:35 | Source : CNBC-TV18
Updated at Wed, Jul 27, 2011 at 23:03
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. Like this story, share it with millions of investors on M3 Brokerages mixed on Cairn-Vedanta ownership transferEleven and a half months after the Cairn-Vedanta transaction was announced, the change in ownership now seems like a done deal. The Cairn India board has decided to call a postal ballot of all shareholders on the government’s preconditions for the deal, reports CNBC-TV18.Post your opinion here
Eleven and a half months after the Cairn -Vedanta transaction was announced, the change in ownership now seems like a done deal. The Cairn India board has decided to call a postal ballot of all shareholders on the government’s preconditions for the deal, reports CNBC-TV18.
Brokerage houses however have given a mixed reaction to the move. Goldman Sachs, which has a neutral call on the stock, says if the governmenr’s conditions were implemented, FY12 earnings per share on Cairn India's could decline by 27 % to Rs 52.
Nomura, which has a buy on the stock, says the impact of the pre-conditions has already been priced in. Nomura expects the stock to gain from the Vedanta deal.
Macquire has downgraded the stock with a target price of Rs 280 per share.
Meanwhile Vedanta is holding an annual general body meeting in London to consider the deal. CNBC-TV18’s Sanjay Suri reports on the key takeaways from the AGM.
There been protests against the environmental footprint of Vedanta and compensation issues in Orissa. The issue before the AGM really is the long delayed Cairn-Vedanta deal for oil exploration in Rajasthan through that agreement. Its implementation has been held up by the Indian government over arguments from the ONGC. This, ofcourse, have been adopted and supported by the Indian government, that the royalties owed by ONGC under the deal envisages are too high and that need to be reduced.
It is now expected that shareholders will accept a reduced valuation but some estimate that USD 300 million which should clear the ground for the deal to go ahead and for oil exploration and extraction to be stepped up.