Cairn India shares fell 3.5 per cent to an over one-month low after the company cut FY16 capex to US $500 million from US $1.2 billion, citing lower oil prices.
Stocks of Cairn, the country's largest private sector crude oil producer, fell to their lowest level since February 2. The stock closed 2.09 per cent lower at Rs 239 on the BSE.
"Given Cairn's strong balance sheet and low finding and production costs, the extent of capex reduction seems too severe to us," global investment bank Jefferies said in a report.
The financial services provider maintained a 'hold' rating and reduced price target for Cairn India to Rs 250 from Rs 253.