With Vedanta hooking up into the energy sector without prior experience, likely red flagged by the DGH/MoE for immediate follow up, the valuation for Cairn at $8.5 Billion for 40% of Cairn Energy's stake seems set to end up as the total outgo for a new entrant like Vedanta, policy riding rough shod over private exit ambitions. But as I am told Vedanta will be one of the only apart from BHP Billton to straddle mining and Oil interests. With three fields including Mangala in India, Cairn is fairly valued at $16 billion, which comes to around Rs 400 per share for the listed Cairn India, currently moving at a 10% discount, thus making $8 billion the asking price for a 50% stake covering the promoter purchase and the first open offer from VEdanta. After that the mandatory open offer for 20% will kick in and if completed Vedanta will end up with 75% of Cairn, LIC holding 2.5% and another holding 15%

Even IDFC has one share in Oil E&P fields thru its Private Equity Arm in a state owned GSPC/Andhra find and the p revailing prices of oil and gas are only likely to rise despite limitless capacity additions in NELP VII, or acquisitions by Reliance. 

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