Reliance Industries, India's most valuable company, will push into two new sectors, power and telecommunications, chairman Mukesh Ambani told shareholders Friday.
It is the most concrete statement to date from Ambani, India's richest man, as to how he intends to use the new freedom he won in late May, when he and estranged brother Anil scrapped a family noncompete agreement that had barred him from entering India's fast-growing telecom, financial services and power sectors.
Five years ago today, the estranged brothers signed a family pact that divided their father's empire, with Mukesh getting petrochemical interests and Anil getting communication, power, and financial services.
That neat division was undone May 23, when the brothers scuttled their noncompete agreement as part of a much-hyped peace pact.
"Scrapping of the agreement has certainly been positive," said Angel Broking analyst Deepak Pareek. "It's opened up new growth opportunities."
Mukesh has already made his telecom ambitions plain, paying $1 billion for a 95 percent of Infotel Broadband Services on June 11, the same day the privately held company won pan-India broadband spectrum in a government auction.
Reliance Industries plans to build its nationwide broadband network in an "asset light, but partnership heavy" approach by collaborating with service and infrastructure providers, Mukesh told shareholders at their packed annual meeting Friday.
The company did not rule out the possibility of buying a stake in the telecom tower business that Anil Ambani plans to spin off from Reliance Communications.
Mukesh now also has the freedom to realize his father's vision of building a power supply chain for energy-hungry India, spanning generation, transmission and distribution.
Mukesh said Friday Reliance is "drawing up specific plans for mega-investments" in the power sector, including clean coal, solar and nuclear power initiatives.
Reliance also plans massive capacity expansion in its core polyester and synthetic rubber businesses and intensified oil and gas exploration — including potential development of further gas shale assets in the United States.
There were few fresh signs of brotherly love on display Friday, but shareholders are already reaping the rewards of the family detente.
Shares in Reliance Industries have risen 4.9 percent since the peace declaration. Anil's companies have done even better, with Reliance Natural Resources jumping 24.4 percent and Reliance Communications up 29.7 percent.
The brothers are now renegotiating the terms of a gas supply agreement that was also enshrined in the family pact after the Supreme Court ruled that the government — and not a private contract — has ultimate say over gas prices and allocation.
Mukesh said Friday he is happy to sell his brother gas, as soon as Anil's new power plants are ready, provided the government approves the price and amount.
"We look forward to a harmonious and constructive relationship," he said.
In fact, Mukesh already sells Anil gas for a power plant in the state of Andhra Pradesh, at the same government-set price — which is about double the price in the old family deal — it offers to its 34 other customers.
Anil did not come to the meeting Friday, despite media speculation that the two might share the stage.
Mukesh ended his remarks by asking for the blessings of his mother and dead father but made no mention of his little brother.
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