Cairn Energy on Monday set a price range of Rs160-Rs190 a share for the flotation of Cairn India in December, implying a market capitalisation for the unit of $6.32bn-$7.5bn.

The UK oil group disappointed some investors in October when it said it would only sell off 30.5 per cent of Cairn India, rather than the 49 per cent some had hoped for. On the basis of the range announced on Monday, its retained stake in Cairn India would be worth between $5.72bn and $6.9bn.

Cairn’s share price received a boost last week when it sold 10 per cent of Cairn India to Malaysian national energy group Petronas for Rs176.48 a share in a private placing. That implied a value of around $6.3bn for Cairn India, some $300m-$400m more than analysts had expected.

The share price received a further fillip from Monday’s announcement, standing 1.74 per cent higher at £19.87 in mid-morning trade.

Cairn said the gross proceeds expected to accrue to Cairn after the IPO, and once Cairn India had received $600m to be used as working capital, would be in the range $1.33bn-$1.63bn.

The final price for the Mumbai offering will be determined after bookbuilding that is due to be completed in mid-December.

Cairn India comprises Cairn’s assets in Rajasthan, where fields under development are estimated to have proven and probable reserves of 864m barrels of oil equivalent.

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