A Tale of Two RPLs; The Ambanis revive the equity cult their father pioneered

The numbers are huge on both sides (the brothers had reached a settlement to go their own ways in June'05). Consider the projects in the respective pipelines: [Mukesh] raised the funds to bankroll a 29 million tonnes per annum greenfield refinery at Jamnagar that calls for a total investment of Rs 27,000 crore. [Anil Ambani] has power projects totally some 24,200 mw that will need a little under Rs 32,000 crore to execute. Both issues were oversubscribed big-time--the refinery one, 52 times and the power one, 73 times. But it's the price at which Anil's RPL lists that could decide which RPL really rocks. At the time of writing, the RPL with the refinery had a market capitalisation of around Rs 90,000 crore. At an offer price of Rs 450, the power RPL will have a market value of a little over Rs 1 lakh crore. The listing price will of course widen the gap. If the grey market price of close to Rs 900 is indeed going to be the price at which Anil's RPL lists, it could boast a mind-boggling market cap of Rs 2 lakh crore. And don't forget: The promoters hold 90 per cent of the power RPL (See RPL vs RPL). Despite that the markets thumbed down top-line IT stocks. At the time of writing, the Infosys scrip had touched a 52-week low of Rs 1,305, while TCS was not too far from its own 52-week low of Rs 811.25. Macquarie Securities Technology Analyst, Suveer Chainani, says: "The results this time were a non-event. Perhaps the markets are looking for a trigger beyond just good results." Perhaps a trigger like the extension of a tax holiday beyond 2010--something that seems unlikely as of now. The possibility of a recession in the US, a spillover effect on IT spending in Europe coupled with the ever-appreciating rupee (IT appreciated 2 per cent in the last quarter) acting as spoilers. For now, the IT companies are sticking to a 'wait and watch line' and flaunting a robust deal pipeline. "There is nothing in the environment from project cancellations or pricing or something like that to panic about...we have been able to sustain momentum," commented S. Gopalakrishnan, CEO, Infosys. Similarly, TCS which bagged nine large deals during the last quarter, including a $1.2 billion Nielsen deal, says it has several large deals. "We are pursuing 25 deals in the $50-100 million range," says N. Chandrasekaran, COO, TCS. Dalal Street of course isn't listening. So will 2008 mark the return of general entertainment channels (GECs), which had lost advertising ground to news channels in