Sucheta Dalal :Anil and void
Sucheta Dalal

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Anil and void  

January 19, 2011

A deal on the transmission towers business will intensify speculation about the further ties between the two ‘Reliance’ groups

Just five years after the hoopla over its new brand identity, Anil Ambani’s latest modification to the corporate name is certain to trigger confusion (among investors and consumers) over separation of ownership between the companies controlled by the once-warring siblings. The narcissistic ADAG (Anil Dhirubhai Ambani Group) tag has gone from the designer logo, and only the blue-and-red lettering with the double apex remains. When the old logo was unveiled, Anil said it reflected a change “in attitude, in mindset, in belief, in dreams, hopes and expectations.” Given how his stocks have soared after ADAG was dropped, investors would like to roll back the past eight years. Let’s face it; the ADAG entity shares weren’t really going anywhere, despite the many corporate announcements from group companies. Now that the intense animosity between the brothers has cooled, there are hopes of unification. Despite denials from both sides for several months, Mukesh Ambani’s close confidant Manoj Modi is apparently discussing telecom with ADAG executives. Market expectations about the future range from the cynical to the fanciful; but those in the know believe that some deal or collaboration may be in the offing with regard to the transmission towers business which is part of Reliance Infratel Ltd. These sources say that a ready-made transmission towers network is key to Mukesh Ambani’s ambitious plans for the broadband wireless access acquired through Infotel Broadband, earlier belonging to the Nahatas of Himachal Futuristic Communications. If such a deal fructifies, it will intensify speculation about the further ties between the two ‘Reliance’ groups and trigger price volatility in share prices. This will always work in favour of the younger sibling’s stumbling entities. —
Sucheta Dalal

-- Sucheta Dalal