MUMBAI: Shares of Cairn India Ltd on Friday climbed over 5 per cent to hit a record high of Rs 358 on the BSE amid reports that Vedanta Resources is in talks to buy a majority stake in the subsidiary of UK-based Cairn Energy.

The scrip, which was flat for most of the session, shot up in the final hour of trade on the Bombay Stock Exchange to settle with a net gain of 4.36 per cent at Rs 355.45.

Analysts said the stock zoomed on reports that Vedanta is in talks to buy a 51 per cent stake in Cairn India from its parent firm, Cairn Energy, which holds a 62.4 per cent stake. The deal size is estimated to be between USD 8-8.5 billion.

"The deal is positive for the stock, as even the lower- end of the deal ($8 billion) will value Cairn India at USD 15.7 billion compared to the current market cap of $14.4 billion," Elara Securities analyst Alok Deshpande said.

"In the short term, we expect the stock to rally towards the deal valuation upon the official announcement, which is expected on August 16, according to media reports," he added.

Cairn India's parent company, Cairn Energy Plc, also zoomed nearly 2 per cent on the London Stock Exchange and was being quoted at 4.61 pounds in late afternoon trade.

In contrast, NRI billionaire Anil Agarwal-led Vedanta Resources Plc plunged by 5.5 per cent to 20.61 pounds on the LSE.

In addition, Sterlite Industries, a Vedanta Group firm, sank by over 4 per cent to close at Rs 160.70 on the Bombay Stock Exchange. Sterlite was the biggest loser in the Sensex pack today.

"If the deal happens, it is obvious that Vedanta is planning to be a long-term investor. In that case, we feel the deal valuation is fair, considering our expectations of a reserve upside from other Rajasthan fields in some time in the future," Deshpande said.