With the acquisition of a majority stake in Cairn India, Anil Agarwal-managed Vedanta Group took a great leap forward — after the acquisition, the group will manage firms whose value will be third, after the Tata Group and the Mukesh Ambani Group.
With a market capitalisation of R194,486 crore (this includes the market capitalisation of Cairn India), the Vedanta Group has crossed the markets value of the HDFC Group (R183,618 crore) and Infosys Technologies (R158,367 crore).
To put this number into perspective, it has grown by 54 times in 10 years, from R3,600 crore in 2000. Meaning, the group has been growing at a compounded annual rate of 49 per cent.
The group's Indian listed entities saw a jump in their share prices and market capitalisation in the years 2003 and 2007, when Vedanta got listed on the London Stock Exchange and the New York Stock Exchange respectively along with consolidation in business through acquisitions over the years.
Minus Cairn India, Vedanta's market capitalisation stands at R131,331 crore.
Cairn India will become an addition to the group's existing catalogue of listed entities — Sterlite Industries, Hindustan Zinc, Sesa Goa and Sterlite Technologies.
While the group's primary interests are in mining metals, it will now diversify into exploration of oil and gas with the new purchase. In 2009, the group had acquired the Goa-based iron ore company Dempo for R1,750 crore, while it paid R4,070 crore to acquire a 51 per cent stake in Sesa Goa in 2007.
Vedanta got listed on the London Stock Exchange in 2003 by raising $825 million and on the New York Stock Exchange in 2007.
Share prices of Cairn India fell by 6.4 per cent to close at Rs 333, while those of Sterlite Industries and Sesa Goa fell 0.1 per cent and 8.9 per cent to close at Rs 161 and Rs 323, respectively.