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Dabba trade reveals Anil?s true wealth

Reliance Infocomm may emerge as a goldmine, writes Suman Layak.

india Updated: Feb 03, 2006 02:03 IST

Anil Ambani may easily overtake brother Mukesh by a long way as the third richest Indian as soon as he decides to list Reliance Infocomm. The Forbes magazine lists Lakshmi Mittal as the richest Indian (Rs 90,000 crore) followed by Azim Premji and the Ambani brothers at third and fourth.

Reliance Communication Ventures Ltd, the company demerged out of Reliance Industries Ltd, has evoked great interest in dabba trade and the stock is quoted at around Rs 265-280 over the last few days.

Dabba trade is illegal off-market deals. These shares are yet to be listed. Shares of another demerged company, Reliance Natural Resources are trading at Rs 20 to Rs 25.

Premji’s wealth has moved up in the recent bull run to around Rs 61,000 crore and Mukesh Ambani is now worth Rs 34,480 crore.

Anil Ambani’s personal net worth, taking in account his share in various companies, conservatively works out to something in the range of Rs 38,600 crore. Reliance Infocomm, which has moved to the Anil Ambani camp through the demerger, might emerge as a goldmine.

The listing of Reliance Infocomm will be the greatest ‘unlocking of value’ that Anil Ambani has repeatedly stressed about and even ordinary shareholders would benefit as and when the management decides to go ahead.

Anil Ambani directly owns a 35 per cent stake in Reliance Infocomm — transferred as a part of the settlement. He also holds 35 per cent of RCVL, the erstwhile promoters’ holding. And RCVL owns the remaining 65 per cent in Reliance Infocomm.

If RCVL is merged into Reliance Infocomm, just as Reliance Energy Ventures is being merged into Reliance Energy and Reliance Capital Ventures is being merged into Reliance Capital, Anil Ambani will get another 26 per cent shares of Reliance Infocomm, thereby controlling 61 per cent in Reliance Infocomm.

Some rough calculation suggests that RCVL shareholders would get three shares of Reliance Infocomm of Re 1 each for every share of Rs 10 held in RCVL.

If one RCVL share is trading at Rs 270 now, then Reliance Infocomm shares will be worth Rs 90 each.

At this price, the market capitalisation of Reliance Infocomm works out at Rs 44,000 crore. However, analysts have said that Reliance Infocomm might list at a premium price of Rs 125 to Rs 130. At that price, the market capitalisation will be as high as Rs 63,000 crore.

First Published: Feb 03, 2006 01:38 IST