Ambani peace pact: Stocks on fire

The shares of the Mukesh and Anil Ambani group companies were on fire on Monday following the brothers burying their hatchet, with RIL gaining 2.58 per cent and Reliance-Power rallying 7.86 per cent.

The Mukesh Ambani-led Reliance Industries, which is the market leader, soared 5.34 per cent at Rs 1,049 intra-day before settling the day at Rs 1,021.45 or 2.58 per cent up, while the Anil Ambani's Reliance power rallied 7.86 per cent to Rs 149.55 after an intra-day jump of 15.36 at Rs 159.95 and Reliance Natural Resources (RNRL) zoomed 27 per cent during the day to a high of Rs 56.35 and ended the day with a massive 22.58 per cent rally at Rs 54.55 as investors cheered the peace pact between the brothers.

In a surprise announcement on Sunday, the Ambani brothers decided to bury their differences by terminating the 'non-compete clause' from their July 2005 family MoU - which bifurcated the Reliance empire between the brothers - to create an environment of harmony, co-operation and collaboration between their groups, saying this would eliminate any room for further disputes.

The other ADAG counters which saw sharp rally were Reliance Infrastructure which soared 6.23 per cent up at Rs 1,050.05 after jumping a massive 11.89 per cent or Rs 1,105.70; Reliance Communications jumping up 10.87 per cent at 147.90 after rallying 13 per cent during the day; Rpower rallying 7.86 per cent to Rs 149.55 after an intra-day jump of 15.36 per cent to Rs 159.95; Reliance Capital gaining 4.8 per cent to Rs 672.10 after a 10 per cent rally at Rs 696, and Reliance Mediaworks closing 3.9 per cent up at Rs 173.20 after an intra-day rally of over 10 per cent Rs 186.

The other Mukesh Ambani group company, Reliance Industrial Infrastructure soared (RIIL) 18.23 per intra-day to touched a high of Rs 832, and settled the day at Rs 783.55 up 11.35 percent.

"The RIL-ADAG group non-compete agreement is a win-win situation for both groups and provides both the companies to expand beyond and also venture into segments, which was restricted earlier. With Reliance being the largest contributor to the indices, the same had a positive rub-off on the markets," Angel Broking chairman and managing director Dinesh Thakkar said.

"The agreement between Mukesh and Anil groups to drop the non-compete clause ahead of its schedule has major significance as far as market is concerned," CNI Research chairman Kishor P Ostwal said.

However, the gain in heavyweight RIL and other group could not hold the markets till the end at the benchmark Sensex closed flat with 0.15 per cent, or 23.94 points at 16,469.55 points after jumping 2 per cent intra-day.

The step toward a peace pact comes within weeks of the Supreme Court asking the brothers to settle their differences over gas amicably in eight weeks. On May 7, the Supreme Court in a judgement rejected RNRL's plea for cheap gas from RIL.