Anil group`s trust in Mukesh`s RIL goes unrequited?

Last Updated: Sunday, October 25, 2009 - 15:46

New Delhi: Anil Ambani group`s mutual fund house trusts Reliance Industries to be of great investment value, but the Mukesh Ambani-led firm appears to have no interest in the largest fund house Reliance Mutual Fund.

More than a dozen schemes of Reliance Mutual Fund, a part
of Anil Ambani group`s financial services arm Reliance
Capital, have invested heavily in RIL. Also, RIL is the single
largest equity investment for at least five Reliance Mutual
Fund schemes.

Reliance Industries, the top valued corporate entity in
the country`s stock market, has investments in various schemes
belonging to about two dozen fund houses, but none with the
largest fund house Reliance Mutual Fund, which is part of his
younger brother Anil`s group.

In its latest annual report for 2008-09, RIL has disclosed
investments in over 60 mutual fund schemes, which belong to
about 25 various fund houses including ICICI Prudential, SBI
Mutual Fund, LIC Mutual Fund, DSP Blackrock and even the new
players like Religare and Mirae Asset MFs.

However, not a single Reliance MF scheme figure among the
mutual fund investments of RIL, which is engaged in a long-
running gas supply dispute with Anil Ambani group firm RNRL
and the case is currently being heard in the Supreme Court.

In contrast, the portfolios of almost all the equity-
investing Reliance MF schemes have RIL as one of their top 10
holdings as on September 30, 2009.

These include top-performing schemes like Reliance Growth
Fund, Reliance Vision Fund, NRI Equity Fund, Diversified Power
Sector Fund, Infrastructure Fund, Regular Savings Fund,
Reliance Tax Saver (ELSS), Equity Fund, Natural Resources Fund
and Equity Advantage Fund.

Besides, RIL is the single largest equity holding for as
many as five Reliance MF schemes -- namely Reliance Regular
Savings (Equity option), Reliance Equity Fund, Reliance Equity
Advantage Fund, Reliance Natural Resources Fund and Reliance
Quant Plus Fund (formerly known as Reliance Index Fund).

The RIL holding of these mutual fund schemes is as high as
close to 10 percent and more than five percent for about
seven schemes.

In its annual report of 2008-09, Reliance Capital had also
disclosed exiting entirely RIL by offloading an investment
worth Rs 129.88 crore in the shares of the country’s most
valued firm.

However, R-Cap continues to hold a little over one percent stake in another Mukesh Ambani group firm, Reliance
Industrial Infrastructure Ltd (RIIL).

At the end of 2008-09, R-Cap’s holding of RIL shares was
nil against 74,85,295 shares valued at Rs 129.88 crore as on
March 31, 2008. These shares account for just about 0.5 per
cent of RIL, but at the current market price of over Rs 2,000
a share, it would have been worth over Rs 1,500 crore.

As per its balance sheet, RIL is the only listed company
whose equity shares were fully offloaded by R-Cap in 2008-09.

However, Reliance Capital continues to hold 1,60,100
equity shares of RIIL valued at Rs 50 lakh as on March 31,
2009. R-Cap’s holding accounts for a 1.06 per cent stake in
RIIL, which at the current market price of Rs 987.40 a share
would be worth about Rs 15 crore.

Bureau Report



First Published: Sunday, October 25, 2009 - 15:46
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