Stock market traders are betting on a change in fortunes for Anil Ambani group companies on the prospect of the

Samajwadi Partys (SP) return to power in Uttar Pradesh. Stocks of Anil Dhirubhai Ambani Group (ADAG) rebounded after witnessing a sharp selloff yesterday. ADAG stocks also witnessed huge volumes, indicating high interest in these counters. In a weak market, the share price of flagship Anil Ambani group companies Reliance Infrastructure and Reliance Power rose 5.52 per cent and five per cent, respectively, as political pundits predicted the SP was close to forming the next government in the countrys largest state. The Sensex fell 1.58 per cent.

ADAG promoter Anil Ambani is a former MP backed by the Samajwadi Party, which has won elections in Uttar Pradesh. Ambanis proximity to the SP is well known and his group has been the partys choice for the states mega power project. An earlier UP government led by the SP had signed a state support agreement for what was touted as the worlds largest gas-based power project to be commissioned by Reliance, with a capital outlay of Rs 11,000 crore.
CHANGE OF FORTUNES? With markets expecting the Samajwadi Party to win the Uttar Pradesh election, the prices of ADAG stocks rose sharply, whereas almost all benchmark indices were down more than 1% 5-Mar ADAG GROUP STOCKS Reliance Infra. Reliance Power Reliance Comm.
BSE prices in Rs *Change over previous close

% chg*

656.15 135.35 96.65

5.52 5 1.58

Compiled by BS Research Bureau

Shares of Reliance Infra, which has important road projects in UP, traded with 2% gains. Reliance Power (1.9%) traded higher on hopes that land acquisition may be accelerated in Dadri, where the company plans to build the world's largest power project.

Reliance Capital (1.4%) and Reliance Communications (1.1%) also traded higher on the Bombay Stock Exchange at 1148 hours. In terms of volumes, Reliance Power saw volumes in excess of 6 million while over 5 million Reliance Communications share exchanged hands till noon.

The BSE Sensex was up 0.22% or 38 points at 17,211.

Reliance MediaWorks touched an intraday high of Rs 97.50 and an intraday low of Rs 94.35. At 09:26 hrs the share was quoting at Rs 95.70, up Rs 1.35, or 1.43%. It was trading with volumes of 41,488 shares.

Reliance Infrastructure touched an intraday high of Rs 679.70 and an intraday low of Rs 661.80. At 09:26 hrs the share was quoting at Rs 670.00, up Rs 13.85, or 2.11%. It was trading with volumes of 271,709 shares.

Reliance Capital touched an intraday high of Rs 436.70 and an intraday low of Rs 430.10. At 09:26 hrs the share was quoting at Rs 433.60, up Rs 6.10, or 1.43%. It was trading with volumes of 152,366 shares.

Reliance Power has touched a 52-week high of Rs 139.40. At 09:26 hrs the share was quoting at Rs 137.20, up Rs 1.85, or 1.37%. It was trading with volumes of 1,256,114 shares.

Reliance Broadcast Network touched an intraday high of Rs 59.10 and an intraday low of Rs 57. At 09:25 hrs the share was quoting at Rs 57.75, up Rs 1.10, or 1.94%. It was trading with volumes of 39,068 shares.

Reliance Communications touched an intraday high of Rs 98.00 and an intraday low of Rs 96.15. At 09:27 hrs the share was quoting at Rs 97.45, up Rs 0.80, or 0.83%. It was trading with volumes of 607,425 shares.

If the SP returns, land for the Dadri power plant is likely to be made available and the project will accelerate. Only, Ambani will have to source gas from outside India, which may not be a problem, to revive the worlds largest power project.

After his split with brother Mukesh in 2005, Anil Ambani had identified the power business as a growth area and UP a key state. Anil Ambani was an independent member of Rajya Sabha in 2004 from Uttar Pradesh during the SPs rule. The bonhomie between him and SP chief Mulayam Singh Yadav was such that the latter was present when Ambani filed his election papers.

The SPs win may give Anil Ambani the much-needed leverage. Stock markets know that both Ambani and Yadav require each other in their scheme of things. The cash flow for Reliance companies may improve once pending power projects are put on execution mode. When the SP ruled the state earlier, Ambanis plan was an 8,000-Mw gas-based power plant in Dadri, which tripped at the land acquisition level itself. The Mulayam government had acquired 2,500 acres on Ambanis behalf, citing public purpose. That did not progress further under the Mayawati-led BSPs rule.