The Hindu Business Line : Mount 10,000 and Reliance

MOST Borivili-Churchgate local trains play host to `gangs' who do the up-downs together, almost on a regular basis, day in and day out. Often, they are from the same neighbourhood or community. Some play cards for `time-pass' while others discuss the nuances of stock market behaviour, that is, after tallying the profits booked and losses made the previous trading day.

The latter group is quite forthright in its analysis and not given to much of the jargon and window-dressing that marks, say, a report from a broking house. Nevertheless, these informal groups of amateur investors often know the pulse of the market as well as anybody else and often form core groups whenever the indices wax and wane.

Thus, it was interesting to listen in on a conversation among one such informal investor group last week... There were five of them — the group leader was called Piyushbhai, while it was not possible to make out the names of the rest.

The question asked was whether the current bout of market buoyancy would last another six months. After much debate, it was affirmed that the run would be good, give or take a couple of minor `shake-ups' along the way.

Piyushbhai, who sounded like a veteran stock market player, had a readymade advisory to the market players — a line of thought that is being shared by more and more people these days. According to Piyushbhai, the market may settle a bit after scaling `Mount 10K' but it will be at its peak come August.

His reasoning was quite straightforward: "Mukeshbhai, like the late Dhirubhai, has an uncanny ability to read the market pulse. If he is planning to come out with the mother of all IPOs in August, the market will be at its peak then".

Lending support to this sentiment is that the RIL scrip, even post-demerger, continues to be an index heavyweight on both the BSE and the NSE. The RIL scrip, pared of its energy, finance and infocomm businesses, still accounts for around 7 per cent market cap on the S&P CNX Nifty, behind only the ONGC scrip, which is at close to 13 per cent. And on the BSE , the RIL market cap hovers around 9 per cent, decidedly behind Infosys at about 10.5 per cent, but playing cat and mouse with ICICI Bank, that juggles for the second-third position with Reliance Industries.

But in a matter of just one week, the equation has changed somewhat for the market-savvy travellers in the local train. Mount 10K has been scaled but many are wary of what is happening on the Reliance counters ever since the latest bout of wrangling broke out late last week.

According to Jignesh, who is a bit more outspoken than Piyushbhai when it comes to touching on the downside of reality, the Reliance Petroleum IPO in August can wait as he is more worried about the immediate future of his investments in Reliance.

"Anilbhai says the management control has not passed to him and, hence, there is a delay in listing the demerged companies; Mukeshbhai says control will change hands only after listing. For RIL shareholders, there will be no clarity on what we stand to gain by the demerger till the listing happens. You can call it ownership issue or management issue — the problem is issues still remain after all this time and they are taking it to the media like last time", says Jignesh.

According to him, each day now is fraught with uncertainty on the Reliance counters as the war between the two Ambani factions is hotting up. That there is no adverse impact on the shares of these companies is cold comfort as the market is on an overdrive now, he says.

Die-hard Reliance counter players like Piyushbhai feel the media is not helping matters either by carrying allegations and counter-allegations between the brothers, word for word. Having introduced the equity culture with the masses close to three decades back, it appears that the Reliance group — both factions — will have to quickly chart out some course of action to ensure that its over 22 lakh investors are not affected in the coming days.

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