Anil Ambani to Mukesh Ambani - Full Text

"In June 2005, with the blessings and approval of my respected mother Kokilaben Ambani, and in line with the vision and value creation philosophy of our beloved founder Chairman, Dhirubhai Ambani, we announced the restructuring of the Reliance Group.

I had sincerely believed then, that we had resolved all issues, and come to an amicable settlement that would create two of India's most dynamic business groups, bring peace and harmony to our family, and generate substantial wealth for millions of shareholders of the Reliance family.

Over the past 4 years, some parts of that promise have been realised.

Unfortunately, the joy of that achievement has been tempered by the sorrow, pain and anguish of continuing disagreement and acrimony with my elder brother, Mukeshbhai.

Over these past 4 years, I have persevered with utmost sincerity, humility and good faith, and left no stone unturned to try and resolve our differences.

To my lasting regret, despite all my well-meaning efforts, I have failed - pushing us even to the extreme step of recourse to litigation to protect the interests of over 11 million shareholders of our Group.

Over the past few weeks, many elder statesmen, trusted family members, and long-standing friends of my father, Dhirubhai Ambani, who have always had the best interests of the nation and the Ambani family at heart, have talked of the need to break the current impasse, and to find a solution that puts an end to this bitterness and rancor; and paves the way for substantial future growth and value creation for the country and millions of our shareholders.

I agree with each one of them. This has been a time of deep sadness and pain for me personally.

Yet, throughout this very trying period, I have maintained the greatest of love, affection and respect for Mukeshbhai - as I have done since my birth.

In that spirit, I have made this pilgrimage today to the holy shrines of Kedarnath and Badrinath, in the hope of seeking divine inspiration and blessings, in trying to heal the wounds, and in making a renewed effort to resolve, reconcile and reciprocate.

I sincerely believe that Mukeshbhai and I can, even at this late stage, sort out all our disagreements, in a constructive, cordial and conciliatory manner, if we both commit to getting this done.

The issues are only a handful, and the facts are well known. My judgement says that they can all be resolved in a matter of weeks, and will not require several months of discussions.

Accordingly, with the blessings of my mother, and invoking the power of Lord Shiva from this most sacred of holy places, I am once again reaching out to Mukeshbhai - and hope and pray that my feelings will be reciprocated, and we will arrive at a solution to all outstanding issues, with a generous heart, a willing mind, and an accommodating spirit.

There can be no better gift to my mother, Kokilaben Ambani in her 75th year, and to the legacy of our beloved father, Dhirubhai Ambani, the proud creator of the Reliance Group."

via TOI

New battle breaks out between Ambani siblings

The estranged Ambani brothers found a new battle front to cross swords over even as the larger war on the gas supply from the KG-D6 block awaits the Supreme Court's verdict. Reliance Industries Ltd. (RIL) issued a notice to a power plant run by ADAG owned Reliance Infrastructure Ltd., threatening to stop gas supplies for non-payment of dues for the first fortnight of September. Reliance Infrastructure, which buys 0.56 mmscmd of KG-D6 gas, paid marketing margin on gas till last month but discontinued it this month. It operates the 220 MW Samalkot power plant in the East Godavari region. The plant requires 1.1mn standard cubic meters a day (mmscmd) of gas of which RIL is supplying half on a fall-back basis though the agreement was for 0.19 mmscmd at a price of US$4.2 per million British thermal unit. RIL is charging US$0.135 per million British thermal unit marketing margin on sale of gas from its eastern offshore KG-D6 fields, a levy which was opposed by NTPC. RIL said that the marketing margin it charges is uniform for all the 40-odd customers and is lower than the US$0.17 per mmBtu margin charged by GAIL. Meanwhile, the Power Ministry said it did not approve of RIL charging marketing margin on gas it sold, saying such levies are paid where distribution chain is involved.

KG gas row...Anil Ambani ups the ante

In a speech lasting almost an hour-and-a-half, An emotionally charged Anil Ambani wasted no breath in taking on RIL and his estranged elder brother Mukesh Ambani during the annual general meeting (AGM) of Reliance Natural Resources Ltd. (RNRL). "What RIL has been communicating in the last few years is that it has no regard for its own solemn word, no time for values, no respect for the sanctity of contracts and, most of all, no morality in its headlong pursuit of corporate greed. The most important word for Shri Dhirubhai Ambani was trust and that word has, unfortunately, gone missing. The corporate greed of RIL is a stumbling block in the future of RNRL. "Over the past five years, I have made every possible effort to resolve the outstanding issues with RIL so that we can all focus on realizing our founder’s dream. But, unfortunately, without any success," he added.

He also launched a scathing attack on Petroleum Minister Murli Deora. "It is evident that the apparently biased stance commenced in 2006, coinciding with changes in the ministry. I am not casting aspersions on the integrity of individuals here - I am sure that they have good reasons for their stance," Anil Ambani said. Ambani was also scathing in his remarks about a government decision setting a price of US$4.20 per mmbtu of natural gas, claiming that the price should not be more than US$1.5.

The gas supply dispute between RIL and RNRL vitally affects public interest, RNRL said. The matter concerns power projects of national importance representing a capacity of 12,000 MW of power, and an investment of over Rs50bn, and affects the interests of over 10 million shareholders, it added. RNRL would like to have an early resolution of the matter expeditiously. The Supreme Court has been gracious to fix the September 1 for hearing preliminary aspects of the matter. RNRL counsel mentioned this matter before the Supreme Court on 30th July.

The apex court said that it will give a short date to expedite the decision pertaining to the KG basin gas dispute between RNRL and RIL. "The matter will be taken up on September 1. On that day we will give a short date for early decision in the case," said a bench headed by Chief Justice KG Balakrishnan. The court in its brief order said that it will list the matter on Sept. 1 for further directions.

Richest - no more .. Ambani wealth erodes

The next time Forbes announces its list of billionaires (assuming it dares to do so even amid a massive wealth destruction globally),
chances are that many Indian tycoons will find to their dismay that their rankings have slipped a few notches.

Even if they managed to retain their slots, or even climb up a few rungs, it would still be cold comfort, as few billion of their wealth would evaporate amid the ongoing turmoil in the stock market
.

As the late British financier Sir James Goldsmith remarked when congratulated for cashing out before the stock market crash of 1987, "It is like winning a game of bridge on the decks of the Titanic."

The Sensex recorded the second-biggest single-day fall in absolute terms on Friday when it crashed by 1,071 points, or 11%, to close at 8,701. With this, the index has crashed more than 12,000 points, or nearly 60%, since its peak of 20,873 achieved on January 8, 2008.

Market cap of all the companies traded on the Bombay Stock Exchange
(BSE) has evaporated by a staggering Rs 46 lakh crore, or $940bn during the period. So, how poorer have top industrialists like the Ambanis, Tatas and Birlas become after the meltdown in the share prices of their companies?

An ET analysis of promoter wealth loss between January 8 and October 24, 2008, shows that the two Ambani brothers bore the brunt of the stock market mayhem, witnessing the highest wealth erosion among promoters of the top business houses in the country.

Though still dominating the market cap ranking, RIL chairman Mukesh Ambani saw his personal wealth crash from $57.6bn as on January 8 to $14.4bn as on Friday, a fall of 75% since January 8.

A major part of the wealth erosion happened in the flagship company, RIL, whose market cap has declined by Rs 2.8 lakh crore, or $57bn. The market cap of two other group companies Reliance Petroleum and Reliance Industrial Infrastructure fell by $15.3bn and $0.7bn during the period.

Mukesh’s younger brother Anil Ambani of the ADAG group saw his wealth tumble from $48.4bn to $8.4bn, a loss of 83%. His five companies, Reliance Communication, Reliance Capital, RNRL, Reliance Infrastructure and Adlabs Films, recorded an aggregate market cap loss of $53.7bn.

Realty major DLF is the third-biggest loser where the promoter wealth has eroded from $44bn to as low as $6bn. DLF is followed by Tatas who saw their wealth in 27 listed companies plunge from $38.2bn to $12.8bn, a loss of 67%.

TCS, Tata Motors, Tata Power, Tata Communications and Tata Teleservices are among the key companies in the Tata group to have taken a big hit on market cap during January 8 to October 24 2008.

Via TOI

Mukesh v Anil Ambani

In real life, the two Ambani brothers — Mukesh and Anil — may not be close to each other but in the roller-coaster, volatile world of the stock market which decides who is the richest, they are narrowing the gap between them rapidly. One witnessed the exciting pace between the two for the number one position in "riches" in 2007.

Mukesh became the richest Indian in India in 2007. But Anil was not very far behind. The total market cap of Mukesh’s companies — Reliance Industries, Reliance Petroleum, IPCL (which has now been merged) and Reliance Industrial Infrastructure Ltd — was Rs 1,93,980 crores, or $48.5 billion, as on December 11, 2007.

Anil’s wealth in terms of market capitalisation of his six listed companies was Rs 1,66,876 crores, or $41.7 billion, as on December 11, 2007. Since wealth here is calculated on the basis of their holdings in their companies it is interesting to see how their shares suddenly shot up almost in tandem in the middle of the year without any or little change in the fundamentals of their companies.

Stocks of the Mukesh stable went up like this: Reliance Industries scrip, which was Rs 1,284 on March 15, 2007, closed at Rs 2,818 on November 29, 2007, a growth of 120 per cent, Reliance Infrastructure from Rs 416 to Rs 1,886 in the same period, a rise of 260 per cent, and Reliance Petroleum Limited from Rs 69 to Rs 215, a rise of 213 per cent from March to November, though not a single litre of petrol was produced and the refinery is yet to come up.

Stocks of the Anil group went up as follows: Adlabs Films went from Rs 407 on March 15, 2007 to Rs 939 on November 29, a rise of 131 per cent, Reliance Capital from Rs 598 to Rs 2,278, a rise of 281 per cent, Reliance Communications from Rs 391 to Rs 665, a rise of 70 per cent, Reliance Energy from Rs 462 to Rs 1,664, a rise of 260 per cent, even though the company has not added a single megawatt of new power during the year, and RNRL from Rs 22 to Rs 153, a rise of 597 per cent on no ostensible development.

Where and how stock prices move is one of the huge mysteries of the stock market and the mystery is compounded because the way that the stocks have risen is reminiscent of the way stocks went up during 2002 and ended up in what is labelled as the Ketan Parekh scam. He had a few favourites stocks and they were even called the K-10 stocks. It was later discovered that Ketan Parekh was operating through participatory notes (PNotes) and stocks were pushed up through circular trading.

Analysts taken by surprise: Till the R stocks, as they are referred to, reached these heady heights, not a single analyst or brokerage house had given these stocks the targets that were achieved in reality. The question being asked is whether all analysts were wrong. Does research really have any value? Or is there something more to the R stocks going up?

For instance, in June, Merrill Lynch had given a target of Rs 1,807 for Reliance, a rise of eight per cent; Khandwala Securities a target price of Rs 2,120, or a rise of 27 per cent, when the price was ruling at Rs 1,674; Kotak Institution had given it a negative of 10 per cent, at Rs 1,525, when the stock price was Rs 1,698.

That all analysts can go wrong is not unheard off in these days of the subprime crisis. Not a single analyst or brokerage house, for instance, predicted such a crisis which had been making for a year. But, as some brokers say, the Ambanis are a different league altogether. If some C grade promoter’s stocks had gone up at such a scorching pace, they would have been caught for price manipulation. But in the case of the Ambanis it is very cleverly called "rerating" of stocks.

Financial institutions don’t book profits: Most of the trading in the Reliance stocks seem to have been done in the futures and options sector which is like a casino. According to brokers who track the market, with all this trading, there has been no change in the shareholding pattern of these companies. It should have been reflected in the shareholding pattern in the June and September quarters but there is no change.

What is interesting in this whole ramping up of the R shares is that the institutions have been hanging on to the scrip instead of booking profits.

Ketan Parekh scam: It is an uncanny coincidence that UTI did just this during the Ketan Parekh scam. When K10 stocks like Himachal Futuristic went up without any reason and with such exuberance, the institutions did not sell but clung on to them.

The result was that when the scam blew up, UTI was left with worthless pieces of paper of stocks like DSQ, Pentamedia, Global Tele etc.

In the case of R stocks, too, financial institutions do not seem to be booking profits and continue, according to information provided to the stock exchange, to hold the same number of shares.

Olga Tellis
Via Asian Age

Ambani brothers - making investors happy

The Ambani brothers may well be cracking the whip on the stock market bulls that have lifted investors’ wealth by Rs five trillion, 20 per cent of which is accounted for by their own companies.

The ongoing surge in the stock market has seen the market value of all Indian companies growing by about Rs 20 trillion since the beginning of the current fiscal -- out of which about Rs four trillion has been contributed by the companies controlled by the two Ambani groups.

Moreover, this gain of about Rs four trillion in market value is nearly double of the additional wealth created by the companies controlled by three other entrepreneurs who make up the list of five richest businessmen in India.

Mukesh Ambani group companies, led by the country's most valued firm Reliance Industries, have contributed close to Rs 2.5 trillion to the rise in investors' wealth, followed by about Rs 1.5 trillion by the ADA group.

In comparison, Bharti Airtel, led by Sunil Mittal, has seen its market value soaring by over Rs 75,000 crore in the same period, while KP Singh-led realty giant DLF Ltd has added close to Rs 1.5 trillion to the investors' kitty. DLF was not listed at the beginning of this fiscal.

Wipro, led by the fifth richest Indian Azim Premji, has actually seen its market value declining by Rs 3,800 crore.

The market benchmark Sensex has gained about 6,000 points or about 45 per cent during this period, while the total investor wealth has grown to over Rs 58 trillion from just about Rs 38 trillion at the end of last fiscal.

The country's ten most valued firms -- including PSUs ONGC, NTPC and BHEL besides RIL, Reliance Comm, Bharti Airtel, DLF and ICICI Bank, have contributed a total of about Rs 9 trillion to the gain in investors' wealth.

While the stock market today closed on broadly flat note with the Sensex ending seven points down at 19,051.86, a number of companies from the two Reliance groups rose, with a few even managing to scale new peaks.
RIL dropped 0.6 per cent to Rs 2,648.30; RPL settled 1.5 per cent up at Rs 183.74 after hitting a peak of Rs 185.

Reliance Industrial Infrastructure Ltd also rose 5 per cent to an all-time high of Rs 2,384.90.

In the Anil Ambani group, Reliance Capital rose four per cent to Rs 1948.20 after scaling a peak of Rs 1970, Reliance Communications ended 1 per cent up at Rs 760.65 and hit a peak of Rs 778.50, Reliance Energy rose 3.1 per cent to Rs 1904.40 and scaled a record high of Rs 1959.

Reliance Natural Resources Ltd (RNRL) and Adlabs Films ended lower. Shares of Bharti Airtel and Wipro also ended lower, while that of DLF gained about 2.4 per cent.

The combined market value of the ten biggest companies in terms of market cap currently stands at about Rs 18 trillion, which is nearly double of about Rs nine trillion at the end of the last fiscal.

The collective investor wealth in all the companies controlled by the five richest Indians has grown to about Rs 11.7 trillion from about Rs 5.5 trillion at the beginning of this fiscal, while that of all the companies controlled by the two Ambani brothers has grown to about Rs 7.3 trillion from about Rs 3.35 trillion.

Among individual companies, RIL is the biggest gainer with about Rs 1.9 trillion, while Reliance Communications and Bharti Airtel have seen a gain of Rs 70,000-75,000 crore each. RPL has added close to Rs 50,000 crore, while Reliance Capital and Reliance Energy have each gained about Rs 30,000 crore each.

Ambani brothers - the richest in the world

Move over Bills Gates, Carlos Slim and LN Mittal, the Ambanis are coming. While you may still be figuring out your gains from the phenomenal 788 points rally on Tuesday, the Ambani brothers are on their way to the top echelons of global billionaires’ club. By the time the market closed on Tuesday, the Ambani brothers were worth nearly $81 billion. That is a whopping 8% of what India’s GDP was last year.

Combined, this is greater than the net worth of Carlos Slim, the Mexican billionaire, who was recently crowned as world’s wealthiest individual ahead of Bill Gates.

In all, the top-15 business families in India (excluding the Tatas) added close to $11 billion to their net worth all in a day. The combined net worth of the top 15 stands at $213 billion, or close to 20%, of the GDP.

What’s more, Mukesh Ambani is now within striking distance of dethroning LN Mittal as the richest Indian. Though the latest figures are not available, LN Mittal is estimated to be worth around $48 billion, only $2 billion more than the current net worth of Mukesh Ambani. Another 4% appreciation in Reliance Industries stock price and Mukesh Ambani will go past Mr Mittal. The rate at which the Mukesh Ambani-owned companies are going, his net worth rose by $3.25 billion on Tuesday, this might well have happened by the end of the day.

Equally astonishing has been the rise of Anil Ambani. The younger Ambani sibling added over $3 billion to his net worth on Tuesday. He is now worth nearly $35 billion and second only to his elder brother.

The other big gainer for the day was Sunil Bharti Mittal, who is riding high on the rising market capitalisation of Bharti Airtel. The telecom czar added nearly $1.25 billion to his net worth on Tuesday, thanks to a 5.6% rise in his company’s market price. He is now worth $22.4 billion. DLF’s KP Singh also got richer by a billion dollars and he is just a shade behind Anil Ambani at $32.6 billion at number three. (All calculations have been made by netting out the crossholding among group companies)

Mukesh Ambani v Anil Ambani - Two Years of Separation

Mukesh Ambani v Anil Ambani - Two Years of Separation

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