(Updates with comment from analyst in fourth paragraph.)
Feb. 2 (Bloomberg) -- Rahul Dhir, the chief executive officer of Cairn India Ltd., sold more than half of his shareholding in the company for 512.7 million rupees ($10.5 million) ahead of getting his last round of stock options.
Dhir sold 1.5 million shares in five transactions from Jan. 30 to Feb. 1 through the stock exchanges, according to a regulatory filing today. He now holds 1.3 million shares, according to the filing. The CEO couldn’t immediately be reached for comment on his mobile phone, which was switched off.
The sale by Dhir was his first since the company was acquired by Vedanta Resources Plc last year in an $8.7 billion deal. The company received government approvals to boost output after the acquisition was completed, a key requirement for Dhir to get the final one-third of 6.7 million shares awarded to him as stock options.
“Cairn’s business outlook is good, with oil production expected to grow,” said Kamlesh Kotak, vice president of research at Asian Markets Securities Pvt. in Mumbai. “It will be interesting to see how the new owners and the older management gel and work together.”
Cairn India fell as much as 3.1 percent to 336.05 rupees and traded at 338.85 rupees as of 3:13 p.m. in Mumbai. The benchmark Sensitive Index climbed 0.9 percent. The stock rose 8 percent in January, the fourth month of gains.
Dhir will be entitled to the stock options after the company produces 150,000 barrels of oil a day from the Rajasthan block for 30 days, according to the 2007 annual report. The target may be achieved by the end of February and output may increase to 175,000 barrels a day by March 31, Dhir told analysts on Jan. 24.
The explorer, based in Gurgaon near New Delhi, started a second field in Rajasthan state last month, it said Jan. 24. Cairn India has the potential to boost production beyond the target of 240,000 barrels a day, Dhir told analysts that day.
The company reported net income, including that of units, rose 12 percent to 22.6 billion rupees in the three months ended Dec. 31, beating analysts’ estimates.
Dhir, who became CEO on Aug. 22, 2006, previously sold shares in Cairn India in 2009. He offloaded 1.5 million shares on Aug. 5, 2009, at 240.05 rupees each and 196,139 shares at 242.45 rupees apiece the next day, according to data compiled by Bloomberg.
He bought 1.6 million shares at 142.85 rupees each on Dec. 8, 2008, and 638,078 shares at 152.95 rupees each on Dec. 19 that year from the stock markets, according to the data.
Dhir received a salary and bonus of 68.8 million rupees in the year ended March 2011, according to data compiled by Bloomberg.
Vedanta Resources and its unit hold 59 percent in Cairn India after completing the acquisition in December. London- listed Vedanta, a miner without any experience in oil and gas production, appointed three of its representatives on Cairn India’s board, including Chairman Navin Agarwal, in December.
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