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| Indian markets are growing beyond Ambanis, says Newsweek |
| Press Trust Of India / New York Aug 17, 2009, 00:18 IST |
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In a sharp contrast to the popular notion of Reliance group deciding the course of action for Indian markets, there has been “surprisingly little collateral damage so far” from the “the bitter and very public” ongoing corporate battle between the billionaire Ambani brothers, according to a senior investment banker.
“When two elephants fight, the grass suffers. So goes the African saying, and a few years ago it would have been true of the Indian market,” Morgan Stanley Investment Management’s Head (Emerging Markets) Ruchir Sharma wrote in an article for Newsweek magazine.
“But the bitter and very public corporate battle between the billionaire Ambani brothers, who control the Reliance Group of companies, has produced surprisingly little collateral damage so far,” the magazine issue, dated August 31, said.
“For a long time, the popular notion was that as the Reliance Group went, so went the Indian stock market. Now investors can ignore the family feud because the market is so much bigger.”
“At the start of this decade, Reliance was one of five Indian companies with a market value of more than $5 billion. Currently there are 40 such companies, the total value of the market is more than $1 trillion, and the Reliance Group accounts for less than 10 per cent of the total,” the report added.
“The reduced focus on the Reliance Group is part of a broader trend, in which the obsession with the top of the pyramid is shifting to a growing interest in the bulging middle. In 2006 and 2007 — the heyday of the growth boom — all eyes were on the wealth of India’s richest few,” Sharma noted.
According to the article, the media started keeping a tab on the number of Indians making it to the Forbes list of billionaires, as the stock market surged and at the end of 2007, there were 10 Indians in the top-100 — trailing only the Americans and Russians in number.
The ongoing feud between the two brothers, over supply of gas from elder Mukesh-led RIL’s Krishna-Godavari fields to younger Anil-led group firm RNRL, has been under focus for many months now and the battle has now reached the Supreme Court of India.
There were four Indians among the world’s 10 richest in 2008, including the two Ambani brothers, before it fell down to two this year after a sharp meltdown in the stock market. There were a total of 53 Indians among the world’s billionaires in 2008, but it fell to 24 in 2009.
Mukesh Ambani was ranked as the world’s seventh richest in the Forbes list, published in March this year, with a net worth of $19.5 billion, while Anil was ranked 34th with $10.1 billion.
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