Monday, November 29, 1999

ANALYST VIEW - Reliance seeks constructive ties with ADAG

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Mukesh Ambani, chairman of Reliance Industries , said the firm is ready to provide gas to power plants controlled by his brother Anil Ambani's Reliance ADAG and looks forward to a "harmonious and constructive" relationship with the company.Following are comments from analysts:NITIN ZAMRE, MANAGING DIRECTOR AT CONSULTANCY ICF INTERNATIONAL, NEW DELHI:"The AGM is on expected line. The two brothers coming together throws open opportunity for both RIL and ADAG, but more for RIL."Given the fact Reliance has core competency in building very large projects, power is the next opportunity mainly ultra mega power Projects, data management and shale gas."GAJENDRA NAGPAL, CEO OF UNICON FINANCIAL, NEW DELHI:On expansion into power: "They are sitting on so much cash. It's a natural extension of Reliance's business of energy. To that extent, it seems like a well thought of move. I am extremely bullish on the counter in the long run. He is absolutely making all the right moves."On share movement: "Expectations are slowly tickling down. I see no reason why shares should fall now. It's just profit taking."One would want to hear about his financial services foray. That also seems like a big opportunity."ARUN KEJRIWAL, DIRECTOR OF RESEARCH FIRM KRIS IN MUMBAI:"There were a lot of unrealistic expectations built around Reliance AGM. The hype is now fading, which is reflected in the share price movement."MARKET REACTION:At 12:12 p.m. (0642 GMT), shares in Reliance Industries were trading down 0.4 percent at 1,067 rupees, after rising as much as 1.7 percent in early trade. The main index shed 0.2 percent after climbing 0.6 percent early.Reliance Natural Resources<RENR>, controlled by the Anil Dhirubhai Ambani Group (ADAG), was down more than 7 percent.BACKGROUND: - In May, Mukesh Ambani won a Supreme Court ruling in a gas pricing dispute with Anil that had embroiled New Delhi and ultimately brought the long-estranged brothers to the negotiating table.- Exactly five years ago, the two brothers split the business empire founded by their father after disagreements over ownership, and the non-compete agreement had been a source of acrimony between the two.- Reliance shares have the highest weighting in India's main stock index, the 30-share Sensex.(Reporting by Mumbai Bureau; Editing by Ranjit Gangadharan)(For more business news on Reuters India click
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