Mumbai: Anil Ambani, billionaire chairman of the Reliance-Anil Dhirubhai Ambani Group (R-Adag), seems to have gained the most in the run-up to and following the ruling United Progressive Alliance’s (UPA) victory in Tuesday’s trust vote in Parliament.
The aggregate market value, or market capitalization of companies controlled by Anil Ambani, perceived to be close to the Samajwadi Party’s (SP) Amar Singh, has risen 33% in the past five trading sessions and 38.2% since early July when the party, which has a base largely in Uttar Pradesh, announced that it would support the government.
In the past five trading sessions, the aggregate market value of companies controlled by Anil Ambani’s estranged elder brother Mukesh Ambani has risen 15.4%, trailing both India’s benchmark indices, the Bombay Stock Exchange’s Sensex, which has risen 18.82% in this period, and the National Stock Exchange’s Nifty, which has risen 17.3%.
Since the SP announced its support to the UPA, the market value of Mukesh Ambani’s companies have increased 9.23%. The SP has recommended to the government that it consider levying a windfall tax on private refiners. Reliance Industries Ltd (RIL), controlled by Mukesh Ambani, runs India’s largest private refinery.
Shares of RIL have risen 16.5% in the past five trading sessions. While this is marginally behind the rise in the Sensex and the Nifty, there is little evidence of a negative impact on the company of the SP’s importance in the new political regime.
There are six firms under the R-Adag fold: Adlabs Films Ltd, Reliance Capital Ltd, Reliance Communications Ltd, Reliance Infrastructure Ltd, Reliance Natural Resources Ltd and Reliance Power Ltd.
The firms whose shares have seen the most increase are Reliance Natural Resources (up 40.7%), Reliance Capital (up 37.3%) and Reliance Power (up 33.5%). There hasn’t been any specific positive news related to any of these firms.
Earlier in the year, however, the shares of these firms had fallen more than the markets. The combined market cap of these firms declined 62% between 8 January — when the Sensex closed at its lifetime high of 20,873.33 — and 16 July, much higher than the 39.75% drop in the Sensex and the 39.3% drop in the Nifty. The fall in the market value of Mukesh Ambani’s firms during this time was 36.77%.
Mukesh Ambani runs three firms — RIL, Reliance Petroleum Ltd and Reliance Industrial Infrastructure Ltd.
R-Adag shares may extend their recent gains, said domestic brokerage India Infoline Ltd in its recent client note, which explains who stands to gain from the new political matrix.