Cairn India Ltd

(Incorporated as a public limited company under the Companies Act. 1956 on August 21,2006) Registered Office: 401 Dalamal Towers, Nariman Point, Mumbai 400 021, India. Tel: +(91) (22) 2287 2001; Fax: +(91) (22) 2287 2002. Principal Business Office: 3rd and 4th Floor, Orchid Plaza, Suncity, Sector 54, Gurgaon, 122 002, India. Tel:+(91) (124) 414 1360; Fax: +(91) (124) 288 9320; Website:www.cairnindia.com;  E-mail:preeti.chheda@cairn-energy.plc.uk

BASIS OF ALLOCATION

PUBLIC ISSUE OF 328,799,675 EQUITY SHARES 0F RS. 10 EACH (^'EQUITY   SHARES') FOR CASH AT A PRICE OF RS. 160 PER EQUITY SHARE OF CAIRN INDIA LIMITED (THE 'COMPANY') AGGREGATING TO RS. 5,260.8 CRORE (THE 'ISSUE'). THERE WILL ALSO BE A GREEN SHOE OPTION OF UP TO 33,000,000   EQUITY SHARES FOR CASH AT A PRICE OF RS. 160 PER EQUITY SHARE AGGREGATING TO RS. 528 CRORE (THE 'GREEN SHOE OPTION'). THE ISSUE AND THE GREEN SHOE OPTION, IF EXERCISED IN FULL, WILL AGGREGATE TO 361,799,675 EQUITY SHARES AMOUNTING TO RS. 5,788.8 CRORE. THE ISSUE WILL CONSTITUTE 18.63% OF THE FULLY DILUTED POST-ISSUE EQUITY SHARE CAPITAL OF THE COMPANY ASSUMING THAT THE GREEN SHOE OPTION IS NOT EXERCISED AND 20.12% ASSUMING THAT THE GREEN SHOE OPTION IS EXERCISED IN FULL.

THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 EACH AND THE ISSUE PRICE IS 16 TIMES OF THE FACE VALUE.

Pursuant to Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 ('SCRR'), this Issue consists of an issue for less than 25% of the post-Issue capital and was made through the, 100% Book Building Process where in at least 60% of the Issue was to be allocated on a proportionate basis to Qualified Institutional Buyers ('QIBs'), out of which 5% was to be made available for allocation on a proportionate basis to Mutual Funds only and the remainder was to be made available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 10% of the Issue was to be made available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue was to be made available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the issue Price.

The Board of Directors of Cairn India Limited wish to thank the investing public for their response to the Issue which opened for subscription on December 11, 2006 and closed on December 15, 2006. The Issue has received 366,041 applications for 372,567,880 Equity Shares, Including monies received from the Underwriters, resulting in 1.0298 times subscription. The details of the subscription received in the Issue from Institutional, Non-Institutional and Retail categories (before rejections)are as under:

Final Demand

A sample of the final demand at different bid prices is as under:

The Basis of Allocation was finalised in consultation with the Designated Stock Exchange - the National Stock Exchange of India Limited ('NSE') December 29, 2006.

A) ALLOCATION TO RETAIL INDIVIDUAL BIDDERS

The Basis of Allocation to the Retail Individual Bidders, who have bid at cut-off or at the Issue Price of Rs. 160/- per Equity Share, was finalized in consultation with NSE. The Company has received 360,633 valid applications for 72,429,735 Equity Shares in this category resulting in 0.66731 times subscription. The number of Equity Shares allotted to Retail Individual Bidders is 72,429,735. Full and firm allotment has been made to all valid applications in this category.

B) ALLOCATION TO NON-INSTITUTIONAL BIDDERS

The Basis of Allocation to the Non-Institutional Bidders, who have bid for at the Issue Price of Rs. 160/- per Equity Share, was finalized in consultation with NSE. The Bank has received 1,043 valid applications for 13,171,900 Equity Shares in this category resulting in 0.36407 times subscription. The number of Equity Shares allotted to Non-Institutional Bidders is 13,171,900. Full and firm allotment has been made to all valid applications in this category.

c) AI 1 ALLOCATION TO QUALIFIED INSTITUTIONAL BUYERS

The Committee of Directors for the Issue of the Company; vide resolution dated December 29, 2006, has approved the basis of allocation of Equity Shares and allotted the Equity Shares to various successful applicants.

The Confirmation of Allocation Note ('CAN') and Refund Orders in respect of.refunds due to applicants have been dispatched to the address of the investors as registered with the depositories: In case the same is not received within ten (10) days, investors may contact at the address given below. The Refund Orders have been over-printed with the Bank Mandate details as registered, if any; with the depositories. The Equity Shares allotted to successful applicants are being credited to their respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Company is taking steps to get the Equity Shares admitted for trading on National Stock Exchange of India Limited ('NSE') and The.Stock Exchange, Mumbai ('BSE') within seven (7) working days from the date approval of Basis of Allocation.

INVESTORS PLEASE NOTE

These details of allotment made would be hosted on the website of the Registrar to the Issue, Bigshare Services Private Limited at www.bigshareonline.com

All future correspondence in this regard may kindly be addressed to the Registrar to the Issue, Bigshare Services Private Limited, quoting full name of the First / Sole Applicant, Serial Number of the Bid cum Application Form, Number of Equity Shares bid for, Name of the Member of the Syndicate, Place where the bid was submitted and payment details at the address given below:

Bigshare Services Private Limited,
E-2, Ansa Industrial Estate,
Saki-Vihar Road, Sakinaka, Mumbai - 400 072
Tel: +91 22 28470652, Fax: +91 22 28475207,
Website: www.bigshareonline.com,  Email: info@bigshareonline.com,
Contact person: Mr. Subodh Adarkar

This communication is intended for release solely in India. This communication is not an offer of securities for sale in any other jurisdiction, including the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933.

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARE ON LISTING OR THE BUSINESS PROSPECTS OF CAIRN INDIA LIMITED.