Cairn India stock up on hopes of dividend payout

After rising as much as 1.5 percent, shares in Cairn India gained 0.1 percent on hopes the oil explorer will soon announce a dividend payout, and were last

Analysts say the government’s recent approval of a corporate reorganisation at Cairn India is raising hopes for a dividend.

The company’s board of directors is set to meet on 31 October to consider the payment of an interim dividend.

Morgan Stanley said Cairn India has net cash of $2.4 billion, or Rs 65 per share, equaling about 20 percent of its current market capitalisation and nearly equal to its capex guidance over the next two years, leaving “room for the possibility of a higher payout.”

Cairn India on Monday said July-September profits tripled to Rs 2322 crore , just about in line with expectations. The company’s dividend policy was approved by the board in April 2012. As part of this policy, the company aimed at a dividend payout ratio of around 20 percent of the annual consolidated net profits to its shareholders.

Reuters