Cairn India Ltd IPO Message Board (Page 6)

Agree with Rocky, Its good IPO. Just go for it. I have already applied yesterday....

Happy investing & expect 50% profit in any way...
:)

Aman

Internal News....
Cairn India will be openend around 290-300 [Grey market and other factors are indicated].

I am going to apply as much as I can... lookign for the best

Sify Finance

Reasons to apply:
1. World-class resource base
2. Experienced management
3. Exploration expertise in India
4. Strong development and reservoir management skill

Reason not to apply:
1. Sensitivity to crude oil prices
2. High cost of production
3. Pricing issues of the crude oil produced from the Rajasthan basin
4. Uncertainty over pipeline
5. Uncertainty over Cess

dalalstreetinvestor.biz recommended that RII should not subscribe this issue, any commnets on this, they mentiond it is good for only 3+ long term investors.

cairn india should be applicable for those people who plan for the long term investment... it might not be fruitful for the short term gainers.... so the people have limited funds should invest in tanla solutions instead of this....

Dear friends,
Kindly do not believe in Capital Market ratings. It gave the 45/100 rating to Parsavnath Developers and it was trading Rs. 275/- up on its IPO price per share whereas it gave 48/100 rating to Blue Bird and it was trading Rs. 15/- lower to its offered IPO price on the very first day of listing. Isn't it funny? Once I believed in Capital market rating of 51/100 given to Sharat Sea Food Ltd. and I put my money in Sharat Sea Food in 1994. I had purchased 1500 shares from the market. Upto 2000, slowly company's share came down to Rs. 0.50 and in 2000, the company after incurring heavy losses, referred to BIFR. Now, I don't hope to get back my money. I think they give advices without considering the market conditions and companies' position. Really useless suicidal advices from Capital Market. Pls. don't believe in CM ratings.

If one is to believe the market people CAIRN is traded at around 250 rupees and Tanla at 295

On very first day it has been oversubscribed and mind it it has got arond 10000 crore rupees on day one, it was a major reason for todays correction, people want cash to get into CAIRN.I am of the view that Cairns india is one of the most important ipo and it should be very good for all investors whether long, mid or short term. Despite all off-shore/on-shore funda we should not forget that oil sector is demand driven, there is a huge supply shortage and any good company will take care of the profitablity quotient, and CAIRNS international has a wonderful reputation. So moral of the story is if it has been subscribed 1.31 times on very first day, it might subscribe around 30 to 50 times and if that happens, keeping in the view the size of IPO, i think it will be huge success. If it is oversubscribed by more than 20 times it wont list less than 300, that is for sure.

Crain India is just like Reliance Petroleum Uchi Dukan Phika Pakwan. As it has just explored oil in Rajasthan but there are lot of hurdles.

Hi evrbdy,
Pls can anybdy tell me wht is the grey market premium for Cairn energy and Tanla solutions
pls..help.
thanks
Ashish

I agree with some comments made regarding quality of crude. In my opinion stock price will depend more on market setiments.Crude pour point may be high which may have handling issues.
My guess, stock could be picked up below issue price in due course of time.

CM Rated Cairn IPO 50/100. Below is the detail from their analysis:

Strengths

1. The existing cost of producing oil from Ravva field is lower than US$1 per barrel of oil. CIL is continuously producing 50,000 barrels of oil per day (bopd) on an approximate basis at this cost since 2002.
2. The cost of producing oil from the Mangala field of Rajasthan will be around US $ 3.5- $ 4 (bopd). The company has targeted 1,50,000 bpd from the Mangala field at plateau rate.
3. The total gross proved plus probable (2P) reserves attributable to the fields in production and under development in which CIL has interest is 754 million barrels of oil equivalent (mmboe). Its networking interest in these reserves is estimated at 472 mmboe. Most of these 2P reserves are estimated to be in the Rajasthan Block and remains to be tapped.

Negatives

1. The Ravva field was expected to come off its plateau rate of 50,000 bopd in late 2007. So the production of crude will come down from its existing plateau rate. Future production to reach its plateau rate will depend upon new discoveries in the Ravva field, which the company has initiated.
2. The necessary pipeline infrastructure from the Mangala field needs to be developed in time for the commencement of crude oil production in 2009. MRPL is the nominee appointed by the government of India. CIL is not satisfied with the progress of the pipeline made by MRPL. Hence, the company is considering other options like negotiating with private players and even entering such mid-stream activities. This will increase the cost to the company. Moreover, its UK parent does not have experience in mid-stream activities so far. Any delay in setting up pipeline will affect production from the Mangala field.

Valuation
The offer price band is Rs 160-Rs 190. Based on the consolidated financials of CEA, CEH and CEIH for the year ended December 2005, profit after tax (PAT) stands at Rs 92 crore, including one-time income of Rs 230 crore. Also the financials for the six months ended June 2006 are not exciting as they include a write-off of the unsuccessful exploration cost of Rs 236.73 crore on 15 wells digged in Rajasthan block prior to the successful discovery of the Mangala oil field.

Based on existing financials, there is no significant EPS. However, companies like CIL are valued based on projected earning and cash flow from the discovered reserves. Hence, the current PE ratio is irrelevant. However, it is not possible to do such valuation based on data and information available in the prospectus, nor does the company share the underlying data and assumptions behind the working of the offer price.

Parent Cairn has been allotted post-IPO stake of 20.11% at the issue price, or Rs 186, whichever is higher. However, this money will be essentially paid back to Cairn as compensation for acquisition of its subsidiaries. More relevant is the pre-IPO private placement of post-IPO stake of 11.55% at Rs 176.48 with Petronas, Malaysia, as the lead investor.

Only long-term investors should consider the issue. Fluctuations in oil prices and news flow on the progress of the Rajasthan project and other discoveries and winnings of new exploratory blocks will drive the share price post-listing. Earning will matter only after 2009.

Hi Guys,
I was discussing about this company with my uncle who work for oil refinery. He said the same thing as Hemant is saying. The quality of crude cairn found in Rajasthan is very heavy. Only few refineries can process that kind of crude today, which makes it difficult to sell.

Cairn is still hasn’t publish its plan how they gonna handle this.

Vikram

They have discovered oil. However the quality is inferior. It is not yet decided what they will do with it. Who will process it? How it wwill reach to the refinery/port? It seems thes are major concerns.

Hi,

It is very bad. Every co., is appoint as a registrar Intime Spectrum. But, it is surprised to hear that word. Because, regularly we are seeing the problems regarding the I.P.O shares allotment and not refunded the allotment money till today after lapse of 30 days. Yesterday I made a phone call to Intime Spectrum. But, they are not responding in the discussion more than one hour over the phone. So, I made a complaint against that registrar to SEBI. But, no action has been taken, evnthough most of the people are reporting the complaints against the above said registrar. So, please take action. Till today we have not received the 4 Lanco application money and 1 parsvnath money refund. So, please think over about my problem. And another problem we made Rs.96000/- for 320 shares of Parsvnath. But, no shares allotted. They are saying some technical defect, because of that we didnot allot shares. This is their version. So, I request the suffered people, please send the complaints to SEBI.

I heard that Cairns is going to merge with some other company for their business...I am NOT sure about it.. Do someone know whether the impact wld be positive or negative..after merging..

i m of this view that one must get into this ipo, it must list at 300+

this is the best ipo... frdsss just go 4 it... this wil give more returns than the parsvanath....

Hi Folks,

So what is teh final outcome, should we go for this IPO or NOT ?

i feel this ipo is of very good background and pedigree. however given the size and profitibility, i feel it is extremely overpriced.people should buy it only for long term holding and CERTAINLY NOT for listing gains. i expect 75-100% allotment of applied shares and a listing price of around 190-210.
Looking forward to some advice