Atrump Games

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Atrump Games

Buy Cairn India with Long Term View

Cairn India  is one of the sufferer of recent global Oil meltdown. The revenue, profitability, cash flow all went for toss. The majority stakeholder Vedanta offered Cairn India for merger through share swap. Cairn India is cash rich company whereas Vedanta is reeling under huge debt pile. Post the commodity market meltdown, Vedanta revenue and profitability also went for toss. Vedanta also owns majority stake in Hindustan Zinc with huge cash pile and trying very hard to convince government to sell their equity so that they can use their cash to reduce overall cost which will help them to profitability.

At last Cairn India shareholders like LIC India which owns around 9% of the Cairn India voted for merger once Vedanta sweetened the offer as one Vedanta share plus four preferential share and very soon Cairn India Shareholder will be the Shareholder of Vedanta.

In long run once commodity market improves then Vedanta is going to do very well but in short term they will be relying on Cairn India Cash flow plus the dividend from Hindustan Zinc as additional resources of cash to service their debt or debt interest.

One may consider buying small quantity during market selloff and must hold on to share for few years to get real value out of it

Please contact your financial advisor before investing
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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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