How far behind is Anil Ambani from his brother Mukesh Ambani
File photo of Anil(L) and Mukesh Ambani in Mumbai June 24, Reliance Communications is controlled by Anil Ambani and Reliance. A trusted family friend, Jain was the person whom Reliance vice chairman Anil Step 3: In lieu of Anil giving up control in RIL, Mukesh Ambani. ambani brothers India's richest man Mukesh Ambani and his brother Anil Ambani have been in a bitter feud ever since the death of their father.
Mukesh got control of the flagship oil refining and petrochemicals, while Anil got the newer businesses such as power generation and financial services. He also took over the telecoms unit, which under Mukesh had expanded aggressively by bundling phones with mobile connections at throwaway prices. Telecoms Lure At the time, the wireless division seemed to give Anil some of the more promising opportunities. India's burgeoning mobile-phone market was hailed as the future. A non-compete clause between the brothers kept Mukesh out of that arena until the agreement was scrapped in Mukesh quickly returned, pumping in more than 2.
Jio also gave Mukesh the chance to forge his own legacy beyond the shadow of the businesses he had inherited, he said.
Ambani deal - the inside story!
Price War When it came inthe impact was dramatic. By July this year, less than two years after starting the service, Jio had signed up million users and was making a profit. Cash flow from the business, together with a blue-chip rating gave Reliance Industries access to a large pool of cheap capital. Meanwhile, Anil has been selling assets to quell investor concerns around the indebtedness of some of his companies that contributed to declines in his shares. Like his brother, Anil invested billions to expand his portfolio, but the younger brother didn't have a cash cow like the oil refinery to finance growth.
Instead, like other businesses in India and elsewhere, many of his companies increased debt. Bought in as part of his bet on defense as the next engine of growth, the warship and submarine maker has proven hard to turn around. Its loan accounts have been "irregular or substandard" sincethe company said in March. But as it turned out, most of the transactions he was close to sealing did not work out. But today, he has no regrets. Shortly after, I get a call from the Kharafis that they have a competing offer and if I matched it, the deal would be mine.
I was wondering why a competing offer? I have great personal admiration for Sunil, and consider him, in the words of my father, to be a worthy member of the zero-to-hero club.
Five facts about India's Ambani brothers' split
We also got the financing. Then I get a call from Canning— the Ruias were not agreeable.
They wanted to run a bidding process. So there was Reliance, Vodafone and Hindujas. It was a deal worth losing. ByJio had already announced launching its mobile services. We initially said we will be the consolidators. We also did a spectrumsharing and trading deal with Jio. Then came the Jio tsunami. The entire industry was impacted.Mukesh Ambani's wife Nita Ambani Vs Anil Ambani's wife Tina Ambani
It was a full-blown crisis for the telecom sector. The RBI issued a note of caution that no banks should lend to telecoms in India. But with the group under a cloud, Anil continued to face roadblocks.
The banks were unrelenting, and I supported the banks. Also, it taught me many lessons on relationships, trust and respect. You have come empty-handed, and are going to leave emptyhanded.
But before the younger Ambani moves onto his brother's turf, a big clean-up exercise is on to quickly remove any embarrassing linkages. The closure of the Kamla Mill service centre is one such. Even as the final settlement is awaited, there is now endless speculation on how the Ambanis will carve up the sprawling Rs 99,crore Rs billion empire. But while the broad division of assets now seems somewhat clear, the intricate details of how the complex deal will be spun are still cloaked in secrecy.
And that's the real story. After all, as they say, the devil's in the detail. Businessworld spoke to a range of Reliance employees, analysts, corporate lawyers and chartered accountants to piece together a sketch of how the complex deal can be struck. One finding that emerged straightaway from these detailed conversations is that a clear division of assets, as suggested in media reports especially of the investments that RIL holds in Reliance Energy and Reliance Capital, or even a split in RIL is ruled out.
The insider - Economy News - Issue Date: Jan 17,
In other words, he will choose a path that will be easy for the Reliance group to sell to shareholders, regulators and the investing public at large. Before getting into how that can be done, let's explore the reasons why an actual division of assets is so tricky. One, the flagship Reliance Industries' competitive advantage comes from its vertically integrated structure. So, unless the synergies of upstream oil exploration and downstream petrochemicals business continue to exist, RIL's future is threatened.
Besides, splitting RIL could seriously affect investor confidence in the Reliance group. They cannot split it according to their whims and fancies," asserts an equity analyst at a foreign broking house. Two, hiving off RIL's investments in two companies -- Even the Reliance group companies issued a denial to that effect to the stock exchanges last week. The reason is simple: Further, according to the existing rules of the Securities and Exchange Board of India, the buyer would also have to make an open offer to buy a further 20 per cent stake in the two companies at an additional cost of Rs 4, crore Rs 40 billion.
Raising such large amounts of cash is out of the question. Even if the Ambanis were in a position to do so, it would immediately alert the taxman. That also explains why Mukesh cannot buy out Anil's stake in RIL, which would need similar amounts of cash. Finally, cutting off the umbilical cord that connects Reliance Energy to RIL could prove detrimental.