Brand Reliance rules over Indian bourses: ET

Brand Reliance rules over Indian bourses

Just about 30 years on bourses, and yet the Reliance brand is ruling over the 125-year-old Indian stock market, while the year 2007 saw this dominance further growing with its size nearly tripling against less than doubling of the overall market. The two Reliance groups, run separately by the two Ambani brothers, added Rs 5 trillion to their market value of Rs 3.4 trillion at the end of 2006. This is a lion's share in the overall rise of Rs 34 trillion in the total market cap, considering the thousands of listed companies in India.

Interestingly, the surge came despite the financial crisis in global markets, a sharp volatility and the market regulator SEBI adopting extra vigilance on foreign inflows, a key force behind Indian markets' buoyancy in the recent past. Earning the distinction of being one of the fastest growing markets that held the overseas investors in a trance, the bourses also recorded many a milestone such as peaking at over 20,000 points, crossing seven thousand-point marks and the fastest 1,000 point rally, in just four days.

The markets also proved wrong all the experts by demonstrating unprecedented rallies that made lakhs of crores for investors or dried them out in the course of just a few trading seasons. At the same time, market leader Ambanis continued to demonstrate that they were a cut above the rest. The belief seemed something like this, Let the hell break loose or heavens fall, the two brothers could do no wrong for investors and they rightly showed so. The 170 per cent surge in the Reliance market value to Rs 8.4 trillion was much higher than a 92 per cent rise in the total market cap from nearly Rs 36 trillion to over Rs 70 trillion.

Today, the two Ambani groups account for more than 11 per cent of the total market value, against just an iota when Reliance entered the bourses early in 1978. The surge has been of 80,000 times in the Ambanis' market value since then, when it stood at just Rs 10 crore, which is 8 times faster than a jump of about 10,000 times in overall market size, which was about Rs 7,000 crore 30 years ago. All this has been happening when the relations between the two brothers were deteriorating and their names were mentioned in news together only if there was a bout brewing between them.

So much so, the Anil Ambani group shot up a complaint to SEBI charging top officials of Mukesh-led Reliance Industries of sabotaging its group company Reliance Power's upcoming IPO, touted as the biggest ever to hit the market, The bitter battle was even called a blessing in disguise for investors, with market watchers saying that one up-manship between the two was egging them on to grow faster and faster. During 2007, Mukesh-led Reliance Industries (RIL) further extended its market position while becoming the first Indian company to attain a 100-billion dollar market capitalisation. RIL was given a good company in the upsurge not only by the companies belonging to his other group companies such as Reliance Petroleum and those from Anil's camp, but also from traditional conglomerates like Tatas and companies run by new-age entrepreneurs like K P Singh and Sunil Mittal.

As the year drew to an end, conglomerate Tatas held on to their position as the second most valued group, followed by the Anil Ambani group. However, there was not a real challenge to market leader RIL whose appreciation in the year at over Rs 3,00,000 crore was equivalent to the total size of the Anil Ambani group or the Tata group, the two nearest rivals.


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