Biz strong as ever for Ambanis, post-split

MUMBAI: Nearly one year after they buried the hatchet and decided to go their separate ways, the two Ambani brothers have emerged stronger, bigger and more confident of the direction and growth prospects of their respective businesses. Shareholders too seem to have benefited from the sibling rivalry-inspired break-up of the Reliance empire.

Mukesh Ambani’s Reliance Industries continues to consolidate its position as India’s largest private sector company with huge investments in new refining capacity, while Anil Ambani’s Reliance Capital and Reliance Communication have moved rapidly to assert their dominance in their respective industries.

It was on June 18 last year that Reliance Industries released a statement by Kokilaben Ambani about the restructuring of RIL, which would give Anil Ambani independent control over Reliance Infocomm, Reliance Energy and Reliance Capital. Anil Ambani resigned from the board of RIL and all RIL shareholders were given shares of the new companies.

A look at some figures shows how much Reliance shareholders have benefited after the split. Reliance Industries’ market capitalisation has surged 55.9% in the one year to about Rs 1,28,314 crore, while sales has risen 20.6% to Rs 81,211 crore.

The combined market cap of all Mukesh Ambani group companies has jumped 88.4% to Rs 163,356 crore, while net profit has surged 20.9% to Rs 10,110 crore.

Reliance Industries has announced huge expansion plans. A new 27m tonne refinery, special economic zones covering about 60,000 acres across the country, and a massive foray into the retail sector which is ultimately expected to consume about Rs 20,000 crore.

Anil Ambani, on the other hand, has managed to rapidly grow his telecom business into the country’s second biggest in subscriber numbers and the third biggest in sales and net profit. Reliance Communication today has about 20m subscribers, next only to Bharti Airtel. Reliance Capital has also set a scorching pace of growth in its mutual fund business, managing to briefly become the biggest private sector mutual fund with assets under management of over Rs 24,000 crore.

Anil Ambani has also managed to add an entirely new business when the group acquired entertainment company Adlabs Films for about Rs 350 crore last year. Adlabs is a leading player in multiplexes, film production, distribution and processing.