Cairn India's stocks are gaining much traction. Know why

Cairn India surged as much as 9.5 percent and is the top gainer on the Futures and Options space after its biggest minority shareholder, former parent Cairn Energy, is all set to vote against the planned merger of the oil explorer to new parent Vedanta Resources, news reports said.

Cairn Energy holds 10 percent stake in Cairn India, which operates the nation's largest onshore oil field. Cairn India's new owner Vedanta wants to merge Cairn India with its existing global metal operations in a bid to pare down its heavy debt load.

Cairn Energy joins Life Insurance Corp, which holds 9 percent stake in Cairn India, in voting against the merger which is seen detrimental to minority shareholders. Other investors, too, have pledged to work against the planned merger.

Futures of Cairn India rose 12.45 rupees, or 7.5 percent, to 179.20 in the first hour of trade. They hit a high of 183 rupees in early deals.

Cairn India's market capitalisation has eroded nearly 50 percent to 31,300 crore rupees over one year, in line with the fall in crude oil prices, its main product.

(Image credit: Indiatimes)