Family Fortunes: Scenarios

Family Fortunes: Scenarios

THE GROUP

Total Revenue: Rs 99,000 crore

Reliance Industries

Market Cap: Rs 76,179 crore
CMD: Mukesh Ambani
VC& MD: Anil Ambani
Promoters’ Stake: 47%

Reliance Infocomm

Market Value: Rs 40,000 crore*
CMD: Mukesh Ambani
* Estimated by ABN Amro

Reliance Energy

Market Cap: Rs 11,663.4 crore
CMD: Anil Ambani
Promoters’ Stake 50.15%

IPCL

Market Cap: Rs 4,684 crore
Chairman: Mukesh Ambani
VC& MD: Anil Ambani
Promoters’ Stake 46%

Reliance Capital

Market Cap: Rs 1,770 crore
C MD: Anil Ambani
Promoters’ Stake: 48.16%

Reliance Ind. Infrastructure

Market Cap: Rs 115 crore
Reliance Stake: Direct holding is negligible but through corporate bodies, Reliance controls a considerable stake

Other Major companies

Reliance Mutual Fund (Controls Rs 7,200 crore assets),
Reliance General Insurance Co.
Reliance Telecom Ltd, Reliance Life Sciences

FAMILY MATTERS

KOKILABEN: Wife of late Dhirubhai Ambani. Matriarchal presence whose respect is unquestioned in the Ambani family highrise in South Mumbai. Meets her sons every Tuesday.

MUKESH AMBANI: Elder brother's relatively low profile belies formidable intellectual and strategic skills, money power and control over nuts and bolts of the Reliance empire.

ANIL AMBANI: Has brilliant PR, but great social gifts also cloak savvy financial brain. Also, can’t underestimate the drive of a man who runs 20 km everyday.	WHAT’S THE PROBLEM? Brothers differ on who owns Reliance Industries, the risks to the group from Anil’s political links and the huge outlay on Reliance Infocomm. Kokilaben is the person considered most likely to bring about a truce.


THE OWNERSHIP Who exactly owns Reliance Industries? Advertisement

I ndian Public	13%

FIIs	23%

GDRs, NRIs and others	8%

Institutional Investors	9%

Indian Promoters	13%
Persons acting in concert (400-500 private companies)	34%

Funds flow

The crux of the problem is over 400-500 investment companies through which the family owns the promoters' and associate companies' stake in RIL. Anil Ambani feels elder brother Mukesh may now own and control them, though it’s hard to establish this conclusively. The giant firm’s huge cash flow and other strengths are critical to future group plans. If Anil loses any control over RIL he could struggle to fund his ambitious projects—for instance the Rs 11,000 crore power plant in Uttar Pradesh.

WHO GAINS OR LOSES:
A short to medium-term view


Stakeholders	Holding in RIL	If status quo prevails	If Mukesh gets his way	If Anil gets his way…
Mukesh Ambani	An area of dispute: Overall, promoters hold 46.67%	Gainer: He already controls more of the group.	Gainer: he'll have more freedom to invest in telecom and other ventures.	May lose marginally: Retains money power; safe from failure of Anil's plans.
Anil Ambani	An area of dispute: Overall, promoters hold 46.67%	No gain in power or status.	Loser: funding for any venture (commercial or political) gets harder. Role in group would be drastically limited.	Gainer: Key role in group and access to RIL's coffers will help him fund even the most ambitious plans.
Institutional Investors (Foreign and Indian )	31.62%	Slightly negative: Share price can fall from uncertainty over group’s plans.	Neutral: Telecom and other ventures aren't risk-free; still, Mukesh would tie up cash flow to compensate. .	Negative: Concerns on cost of Anil's political ambitions has investors worried, which can hurt valuation.
Indian Public	13.48%	As above; also see impact on retail investor (right).	Slightly negative: Only a few regular traders may match or beat market movements.	Negative: As above; a few regular traders may match or beat market movements

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Family Fortunes: Scenarios