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Anil simplifies group equity structure

Mumbai, Aug. 12: Since the famous split in the Reliance empire in January 2006, Anil Ambani has been cleaning up the clutter.

The younger scion has hacked his way through a forest of closely intertwined investment companies to create a simple and streamlined shareholding structure for his five principal operating companies: Reliance Energy Ltd, Reliance Capital Ltd, Reliance Communications Ltd, Reliance Natural Resources Ltd and Adlabs Ltd.

Even as he has upped the promotersí stake in all his companies to over 50 per cent, Anil has kept the number of entities that hold the stake down to a bare minimum with virtually no cross-holdings between them.

Anil has also created separate holding entities for each of the four major companies over the past six months ó all of which carry his trademark AAA prefix.

These holding companies have the bulk of the promotersí stake while the family holds very little in their own names.

However, Anilís elder son Jaianmol holds more than his mother Tina and almost as much as his father in two companies, while younger sibling Jaianshul holds barely 5 to 7 shares in these companies.

A detailed look at how the shareholding pattern in his group has changed over the past few months reveals that inter-se transfers have taken place within the group, shifting the balance of power from entities such as Anadha Enterprise and Bhavan Mercantile Pvt Ltd to companies that seem to have been specifically set up for each business. Both Anadha and Bhavan held stakes in various group companies.

Anil has now created entities such as AAA Project Ventures Ltd, AAA Communications Pvt Ltd, AAA Global Business Enterprises Pvt Ltd and AAA Enterprises Pvt Ltd. These holding companies own the bulk of shares in one business and they do not have holdings in another firm.

For instance, AAA Project Ventures Pvt Ltd now has 27.99 per cent in Reliance Energy, AAA Global Business Enterprises Pvt Ltd has 47.4 per cent in Reliance Natural Resources, AAA Communication Pvt Ltd owns 63.98 per cent of Reliance Communications and AAA Enterprises Pvt Ltd has a 51.45 per cent stake in Reliance Capital.

Most of the transfers (to these entities) have taken place in the January-March 2007 quarter and this has occurred in all the four companies.

The instance of cross-holdings in the group is also nil even though Reliance Capital holds stakes in Reliance Natural Resources and Adlabs.

Sources close to the group maintain that the holding plan is part of Anilís strategy to put in place a simple structure, minus the clutter of many holding companies and cross-holdings.

Unlike R-ADAG where the promotersí holding is restricted to a few entities, Reliance Industries Ltd, the flagship company of elder brother Mukesh Ambani, has a long list of companies that hold small stakes ranging from as little as 0.02 per cent to a little over 4 per cent. The family members also have small holdings in their individual capacities.

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