Take no prisoners!

 

 

It is the running Mahabharat of India Inc… brother fighting brother for every single pin-head size of property or business deal. Only, unlike in Mahabharata where one set of brothers died, in this business epic of business India, better titled as “Ambani versus Ambani”, both lived to do fabulously well in their separate turfs. And both have promised to fight it out till they live!

Since the time they broke up, the two estranged brothers, Anil and Mukesh, have left no stone unturned in making a mark on the global business map. Whether it is through organic growth of the existing companies, acquisitions and mergers or starting completely new ventures that were out of the box from their own set patterns of business (like gaming industry, with its zapak.com) both brothers have always been in the news for all possible reasons.

The feud between them can be traced back to 2003 when Anil protested against Mukesh’s proposal to convert the preference shares into equity shares with a face value of a rupee into equity shares at Rs 50 per share. A few months later, he raised this price to Rs 96.20 per share. This was also the time when Mukesh's own sweat equity was being issued at a rupee a share. In a nut shell, had the conversion taken place, it would have taken its beneficial holding in Infocomm to 46 per cent from 36 per cent of the increased capital, less than the majority. And this would have been the scenario despite the fact that RIL would have funded about 90 per cent of Infocomm's investment and provided financial guarantees. Anil opposed all that and the conflict of ideas led to a divided business house.

Over the years, both the companies have witnessed a humungous growth. Currently, RIL with its revenue base of over $ 34.7 billion, even has plans to eradicate India’s oil misery completely. In fact, in the recent Annual General Meeting Mukesh Ambani vouched to reduce the country’s oil import bill by over Rs 1.1 trillion. The elder Ambani plans to commission another oil refinery in Jamnagar and double its output to almost 1.2 million barrels per day by next year and sell oil in the Indian market at as less as $25 (roughly) a barrel.

This is an absolutely astounding news for the country which gives a subsidy of almost Rs 245 trillion to its consumers just in order to rationalise the oil price in the domestic market. Also in the wake of Petroleum ministry’s figures that this fiscal Indian oil companies stand to lose $250 million, this new Jamnagar refinery would play a vital role in balancing the demand-supply gap. But all is not well. When the petroleum ministry decided to grant an export unit status to Reliance, there was a huge fracas at the political front which even suggested the incumbent government to implement the windfall tax of 50 per cent on the oil companies which, they said, in a very short span of time generate Rs 1000 trillion for the government. They said at a time when inflation has crossed 11 per cent mark, this money can be used to help the poor. There were huge protests that RIL is making too much money and earning up to Rs 295.8 billion on an average through its oil companies, which according to political parties is not justified. However, all this did not affect RIL’s plans and no one even has an iota of doubt regarding that.

Even when it comes to the ADAG group, the company has been performing phenomenally well. This has been the company which redefined the rules of the Indian telecom industry. With its CDMA technology-enabled sleek handsets, it revolutionised the Indian market. By first offering the free calling facility, RCOM, a subsidiary of ADAG now, not just added millions of subscribers over the years, but also made mobile phones affordable and feasible to the common man.

Both RIL and ADAG’s endeavours have been in the interest of the country. From plans to set up power plants, modify Indian airports, set up metro-station in Mumbai to selling the food, cloth and above all, oil, to the common man, they have tried to do it all. But the biggest problem that invariably put the brakes on each others’ businesses is the unending sparring between the two brothers about who really is the Big Brother so far business is concerned.

For instance, they fought on the gas front, and the united Reliance’s sales from off shore Krishna and Godavari fields was captured by Mukesh who persuaded the government to side with him. The latest example in their conflict of notions has been the misfired MTN deal. Africa’s largest cellphone operator finally withdrew from its talks with Reliance Communication after a nasty public spat between Anil and Mukesh caused such high levels of uncertainty that no one, including the shareholders, were prepared to deal with it. MTN was compelled to end talks after Reliance Industries announced that it had the right of first refusal over any plan to sell out by Reliance Communications under an agreement which was formulated between the brothers at the time of split.

And the brothers spit fire on each other publicly. Anil shrieked: “RIL is seeking to disrupt the creation of one of the world's most valuable telecoms combinations, which will make over a billion Indians proud of our great country,” to this, Mukesh’s rebuttal was “RIL has in good faith notified the Reliance ADAG group and the MTN group of the stipulations contained in an agreement, the validity of which has never been questioned so far by Reliance ADAG.” Had the MTN deal materialised and the reverse merger taken place, it would have created the telecom Goliath of the world, and going by economies of scale, this would have benefited consumers of both the places, Africa as well as India. During the time MTN was in talks and the war of words between Mukesh and Anil, there was a huge slump in the value of RCOM’s market capitalisation which, if reports are to be believed, dropped by almost one-third to Rs 76 billion since the talks started.

Both the brothers are doing whatever it takes to make their respective businesses even bigger, but what pains everyone whether stock brokers, shareholders or even the common man is this unending fratricidal. It has gone to ridiculous personal levels of one-upmanship, with Anil buying his wife Tina a $50 million yacht, to match which, Mukesh gifted Nita with a $60 million jet!

So as in Mahabharat, shared blood did not mean shared wealth. Money, they say is coloured green, but if you look at the Ambani brothers, you would say it is a thicker and more intense tint of red than blood.