WSJ Does a Hit Job on Ambanis

The Wall Street Journal (subscription required) has an interesting piece today on the recent stock surge in the Ambanis’ Reliance group of companies controlled by the two brothers Mukesh and his estranged younger brother Anil Ambani, who run different companies.

According to the WSJ, the steep stock surge has taken the two Ambanis’ total worth to about $100 billion.

Describing the stock surge in some of the Reliance companies as “most puzzling,” the WSJ story has this to say:

The suddenness of the Ambanis’ wealth tsunami has some analysts and investors scratching their heads.

Consider this: The Bombay Stock Exchange’s benchmark Sensex Index has spiked about 30% in the past three months, setting a record intraday high above 20000 on Oct. 29, before losing some ground to end Friday at 18852.87. But during the same period, Reliance Petroleum Ltd., a refining company, has climbed 90%. Reliance Energy Ltd., a power company, has surged more than 130%. Gas-trading company Reliance Natural Resources Ltd. has skyrocketed more than 250%.

Although the two Reliance groups deny that their companies were behind the stock surge, the WSJ cites speculation:

that the Ambanis are using their many holding companies to buy shares in their listed concerns, to solidify control of those companies or to lift their stock prices so they can raise more money through new share sales.

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