Shares of Cairn India fell over 4 per cent in early trade on Bombay Stock Exchange (BSE) after the income tax authorities issued a tax demand of Rs 20,495 crore for failing to deduct withholding tax on alleged capital gains made by its former parent Cairn UK Holdings.
The company on Friday said it will pursue all possible options to protect its interest. The demand on Cairn India follows an order to Cairn UK Holdings earlier in the week.
Cairn Energy, which had in 2011 sold majority stake in its Indian unit to mining group Vedanta for $ 8.67 billion, still holds a 9.8 per cent stake in Cairn India.
Reacting to the news, shares of company declined as much as 4.19 per cent in intra-day trade to Rs 216.25 apiece on the BSE.
In a similar trend, shares of the company slipped as much as 4.30 per cent to Rs 215.95 a piece on National Stock Exchange.
Meanwhile, the broader benchmark BSE Sensex was trading at 28,457.96, down 45.34 points, or 0.16 per cent, at 11:10 hours.