Anil's Reliance stocks soar

A day after Anil Ambani decided to focus on the Reliance masterbrand and drop Anil Dhirubhai Ambani Group from the corporate logo of his empire, stocks of all the six listed companies zoomed.

The stock of the group's flagship company, Reliance Communications, which had been under pressure lately, went up five per cent per today. Reliance Power went up by 2.6 per cent and Reliance Infrastructure went up by four per cent. Reliance Broadcast Network, too, went up by five per cent. Reliance Capital and Reliance Mediaworks went up by two per cent each.

While the markets in general performed well with the Sensex up by 120 points and Nifty by 32 points, the stocks of the group outperformed on the last trading day of the year. In comparison, stock of Mukesh Ambani's Reliance Industries went up only 0.7 per cent.

Analysts say this rise is because the markets are expecting some kind of association or integration between the brothers' (Mukesh and Anil Ambani's) companies, which split in 2005. Both patched up in May, where they dismantled the non-compete clause in the family agreement, allowing them to participate in the businesses the other was currently in.

"If there is anything more to the story, we will know next year, but there seems to be growing confidence in the markets," said Jagannadham Thunuguntla, Strategist and Head of Research, SMC Global Securities. The group, however, termed any possible association between both the groups as baseless speculation. Stock analyst S P Tulsian, who tracks the group closely, calls the rise 'the magic of dropping ADAG'. He, however, said the market was reading too much into the re-branding exercise.

"The market is expecting a part settlement, at least, or that Reliance Communications would go into Mukesh Ambani's fold, which could lead to an improvement in the financial position of the company," said Tulsian.

While a few analysts say the core problems of the stocks like the business environment have not changed, a few others say this increase was fair because the stocks had taken a beating for the last one month.