(Repeats story issued late on Friday)
* Investors disappointed with lack of specific plans
* Ambani says seeks constructive relationship with brother
* Anil Ambani not present at Reliance meeting
* Shares in Reliance, Anil Ambani firms fall
(Recasts, adds detail, quotes, background)
By Pratish Narayanan and Prashant Mehra
MUMBAI, June 18 Mukesh Ambani's Reliance
Industries (RELI.BO), recently freed from a pact that banned it
from competing with his brother's firms, unveiled a push into
the power sector that gave little detail at a hotly anticipated
Ambani, 53, has been avidly pursuing entry into markets
that his younger brother, Anil, 51, is in, ever since the
long-estranged siblings ended their agreement last month not to
compete directly with each other.
Mukesh told Reliance Industries shareholders the end of the
agreement opened up possibilities in a power sector that
provided "unbounded opportunity".
However, investors were disappointed that Mukesh, the
world's fourth-richest man, did not announce more specific
plans and that Anil was not in at the meeting.
"People had built unrealistic expectations that there would
be big-bang announcements at the meeting," said Tejas Doshi,
head of research at Sushil Finance in Mumbai.
Reliance shares, which had gained as much as 1.7 percent
ahead of the meeting, ended 1.5 percent lower, underperforming
the main Sensex .BSESN index.
While many equity analysts welcomed the diversification
plan, some portfolio analysts said Reliance Industries should
stick to its main oil and gas business.
"I would rather see them spending to buy oil assets than
going into other areas," said Helsinki-based Taina Erajuuri, a
portfolio manager at FIM India, which manages $150 million of
Indian stocks, including Reliance Industries.
Anil's Reliance Communications (RLCM.BO), Reliance Natural
Resources Ltd RENR.BO and Reliance Power (RPOL.BO), with
which Mukesh will be competing, also skidded and were the most
active large stocks on the Bombay Stock Exchange.
For a FACTBOX on Reliance's agenda click [ID:nSGE65H08V]
For an ANALYST VIEW, click [ID:nSGE65H08A]
For a FACTBOX on the Ambanis' firms, click [ID:nSGE64N1K6]
Reliance Industries recently made a dramatic return to the
telecom business with the $1 billion acquisition of Infotel
Broadband, the only company to win a nationwide licence for
broadband wireless spectrum in a government auction of three
The Times of India reported on Friday that Reliance
Industries was in talks to buy the tower and fibre optics units
of Anil's debt-strapped Reliance Communications, which closed
down 3.6 percent.
Reliance is also keen to enter the financial and health
sectors, sources have said.
Mukesh Ambani also said the company planned to expand its
presence in the U.S. shale gas business, build a coke
gasification facility in India, and expand its retail business.
The energy-based conglomerate plans to bid for so-called
ultra mega power projects -- those exceeding 4,000 megawatts --
in India, he told shareholders after arriving at the meeting
with his wife Nita and mother Kokilaben.
BROTHERLY HARMONY, BUT NO DEAL
Ambani said he looked forward to a constructive
relationship with his brother's Reliance ADAG group, and was
ready to provide it with natural gas. The brothers split their
father Dhirubhai's empire five years ago after disagreeing over
However, he did not say anything about a new gas deal with
his brother, sending shares in Anil's Reliance Natural
Resources down 7.5 percent.
The Supreme Court said in May the brothers had until this
week to renegotiate the terms of their gas supply agreement and
to abide by the government's price, which is nearly double the
price they had agreed on in 2005. [ID:nSGE64609E]
The brothers split their father Dhirubhai's empire five
years ago after disagreeing over ownership.
Speculation that the brothers may finally do business
together again, however, remained just that.
"People had expected a Bollywood kind of a reunion between
the two brothers at the meeting," said Arun Kejriwal, director
of research firm KRIS.
Reliance Industries, which has nearly 219 billion rupees
($4.7 billion) in cash, is entering a period of heavy
investment, said Jagannadham Thunuguntla, head of equity at SMC
"I expect them to do a series of treasury share sales in
the next six to eight months. So easily you are talking about
$7 billion to $7.5 billion in ammunition," Thunuguntla said.
India is chronically short of power, and scrapping the
non-compete pact means Reliance is now free to build
electricity generation except for merchant power based on
natural gas, an area in which the brothers have agreed to
continue not to compete.
"We are drawing up specific plans for mega investments in
the sector with clean coal-based power generation projects,
hydel (hydro-electric) projects and also in nuclear power as
and when it is opened up," Mukesh said.
Reliance has resources and capability to be a force in
Indian power, but FIM India's Erajuuri said she was sceptical.
"There is, no doubt, a power deficit in India at the
moment, but everybody is building assets, and the question is
how much you are going to get in merchant power. Eventually,
the merchant power prices will come down," Erajuuri said.
(US$1= 46.25 rupees)
(Additional reporting by Ami Shah, Devidutta Tripathy and
Sumeet Chatterjee; Writing by Tony Munroe; Editing by Ranjit
Gangadharan, Anshuman Daga and Karen Foster)