The Rs 5,725-crore buyback offer from Cairn India will commence on January 23 and close latest by July 22.
At the maximum buyback price of Rs 335 a share, over 17.08 crore shares (14.98 per cent stake) could be bought back and extinguished.
The announcement follows the approval of shareholders and the Cairn board on January 6 and November 26, 2013.
Shares under the buyback offer have to be tendered on the NSE and the BSE.
Standard Chartered and Morgan Stanley are the managers to the buyback while Link Intime is the registrar to the issue.
A report by Kotak Securities Private Client Research said: “We expect CIL to report lower bottom line growth on sequential basis on account of marginally lower average crude oil prices and rupee appreciation. In November 2013, the increase in crude oil production from Cairn’s Rajasthan block to about 190 kbopd is encouraging, as it puts to rest our concerns on year-end production target of 200 kbopd. The rising production from the Rajasthan block suggests drilling of infill wells in Mangala field has helped in arresting the expected decline in production and drilling of additional wells in Bhagyam and Aishwariya fields has led to an increase in production. The indicative maximum number of shares that can be bought back would be 17.08 crore, resulting in the reduction of equity capital by about 8.9 per cent.”
On Wednesday, the scrip closed at Rs 326.45 on the BSE, down 1.23 per cent.