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Vedanta completes merger of Cairn India; Stock rises 2.7%

Shares of metals and mining giant Vedanta Limited are among the top stocks hogging the limelight Wednesday morning. At Rs 260, slightly off the day's high of Rs 262.50, Vedanta is now up 2.7% from its previous closing price. On the National Stock Exchange, the Vedanta counter has clocked a volume of nearly 9.3 million shares so far in the session. The Vedanta Group of London-based NRI Anil Agarwal announced on Tuesday that the merger with its subsidiary Cairn India has become effective.

Cairn India, the oil & gas company is debt-free with cash and cash equivalents of nearly Rs 23,000 crore as of 30 September 2016. In a filing to the stock exchanges, Vedanta said that the merged company will have a market cap of $15.6 billion. The group will have one of the strongest balance sheets in the Indian corporate sector with flexibility to balance capital allocation to the higher return projects while providing a strong and stable dividend, it added.

 Vedanta Limited's CEO Tom Albanese said that the merger will increase the appeal of Vedanta Ltd to global investors as it simplifies the structure and increases the size and free float of the company. Vedanta sweetened the deal for shareholders of Cairn India to push through the merger after minority investors, including Life Insurance Corporation of India had opposed an earlier offer. The country's largest insurance company eventually voted in favour of the merger in September 2016. As per the revised scheme, Cairn India shareholders will get one equity share and four redeemable preference shares in Vedanta, for every share they held in Cairn India. Earlier, the offer was one equity share and one redeemable preference share for each Cairn India share. April 27 will be the record date for determining the list of the shareholders of Cairn India to whom the equity and preference shares of Vedanta will be allotted as per terms of the merger scheme. Cairn India shareholders also get to receive an interim dividend of Rs 17.70 per equity share.

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