Mumbai: Indian billionaire Anil Ambani’s call for an end to a bitter feud with his elder brother Mukesh over the split of the family business empire is unlikely to lead to a resolution ahead of hearing next week in their ongoing battle over gas supplies, analysts said.
Shares in firms controlled by the brothers were up on Monday, on hopes for a resolution after Anil Ambani on Sunday made a public call to end the impasse with his older brother, but analysts said the gains may be short lived.
“The rise is just a knee-jerk reaction to Anil’s comments yesterday,” said Alex Mathews, head of research at Geojit BNP-Paribas Financial Services.
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The Reliance empire, which spans energy, telecommunications and financial services, was split between the brothers in 2005 following the death of their father, Dhirubhai Ambani, a legendary Indian business tycoon who built Reliance from scratch.
The siblings have since been involved in several disputes, the latest over a deal for Mukesh Ambani’s Reliance Industries to sell gas to Anil Ambani’s Reliance Natural Resources at below-market rates as agreed in a 2005 family settlement brokered by their mother, Kokilaben.
The dispute flared in the midst of the largest-ever sale of India’s oil and gas exploration rights, which aims to attract at least $3 billion in commitments.
The row between the brothers has led to a near-daily exchange of words, with Anil Ambani accusing petroleum ministry of taking the side of Reliance Industries.
In a statement on Sunday, Anil Ambani said he wanted an end to the impasse. Reliance Industries said it welcomed the move, but added the dispute under litigation was not merely a family matter and that it hoped “any overtures for rapprochement are in no way related to the ongoing hearing of the case”.
“The body language does not suggest the issue will be resolved any time soon,” said Sonam Udasi, vice president of research at BRICS Securities.
“I don’t think anyone is looking for an out-of-court settlement.”
The country’s highest court is set to hear the case over gas supplies on 20 October.
Analysts see Anil Ambani’s move as a step in the right direction, and expect the government to push the brothers to resolve the dispute as it has unnerved investors considering oil and gas exploration in India.
“There will be pressure from the government for the brothers to patch up. Everyone wants to see an end to this as over the next few years it could escalate to many sectors,” Udasi said.
The government has lodged a petition with the Supreme Court to intervene in the gas-supply case, arguing the natural resource is its property. The court, in a hearing on 20 July, did not exclude the government from the case.
At 12:09 pm, Mukesh Ambani-controlled Reliance Industries, which has interests in the energy, petrochemicals and retail sector, was up 1.9% at Rs2,139.60.
Reliance Natural Resources, controlled by Anil, rose 4.8% to Rs87. India’s benchmark 30-share BSE index was up 1%.