Vedanta Resources on Tuesday acquired a 10.4 per cent stake in Cairn India from the stock exchange for Rs 6,620 crore (about $1.5 billion). With this acquisition, Vedanta Resources gets a foothold into India's oil and gas sector.

The Anil Agarwal controlled mining conglomerate, through its subsidiary Sesa Goa, purchased the stake in Cairn India in the open market from the Malaysian national oil company Petronas.

In a statement issued on Tuesday, Petronas said that it has sold its entire 14.94 per cent stake in Cairn India for $2.1 billion.

Vedanta is seeking to buy from Cairn Energy Plc a maximum 51 per cent stake in Cairn India for up to $8.48 billion. But the deal's fate hangs in the balance with the Government yet to take a view.

Sesa Goa has purchased 200 million shares of Cairn from Petronas at Rs 331 a share. A further 51.4 million shares were purchased by Merrill Lynch Capital Markets Espana SA SV and Broad Peak Mauritius Private Ltd. Bank of America helped sell the shares for Petronas.

The sale took place in three bulk deals. While two were carried out at Rs 331 a share, a discount of 1.6 per cent over Monday's closing price, the third was done at Rs 331.47 a share, a discount of 1.5 per cent over Monday's close.

Petronas had acquired a 10 per cent stake in Cairn India at Rs 176.48/share in the initial public offering of the company in December 2006. Between 2006 and October 2009, Petronas steadily increased its stake to 14.94 per cent.

Since the deal was done in the open market, analysts said that Petronas will not require to pay any tax on the sale as it held Cairn India shares for more than a year.

As part of the Cairn-Vedanta deal, Sesa Goa has made an open offer on April 11 to buy an additional 20 per cent stake in Cairn India at Rs 355 a share. The offer closes on April 30. Tuesday's acquisition of shares is in addition to the open offer launched by Sesa Goa on April 11 and the open offer will continue as per the Letter of Offer dated April 11, 2011.

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