Experts see Ambani patch-up bringing new prospects for RIL

Billionaire Ambani brothers have at last struck truce. In a step towards reconciliation of their long-running feud on Sunday, Mukesh and Anil Ambani announced that they are ending non-compete agreements in a step they hoped would lead to cooperation between the two groups.

Commenting on the same, Ashvin Parekh of Ernst & Young said this was a very good opportunity for Reliance Industries, especially in telecom. ''The company would certainly explore entering the financial services sector.'' He further went on to say that insurance and asset management could be easy options for RIL.

Investment Advisor SP Tulsian, said, RIL could be interested in thermal power projects. ''The company would be interested in acquiring two to three ultra mega power projects (UMPPs).''

It would be interesting if the agreement reached a stage of cross holding, which would open avenues for manage risks, Parekh added.

Below is a verbatim transcript of the interview. Also watch the accompanying video.

First your broad brush takeaway from the fine print that you read into the announcements over the weekend?
Tulsian: I see this as a big positive for RIL because having non-compete agreements getting dropped for all the projects expect for the gas based power generation plants is huge positive for the simple reason that RIL is sitting on a cash balance of close to about USD 4 billion as of today. They have the potential to raise to about USD 7-8 billion by selling the treasury stock. They have the annual investible cash flow of close to about USD 4 billion going forward. With these kind of cash at their disposal at a periodical interval, they will be able to take up all the big massive projects which could be in my view thermal power and communication for the time being. Those are the areas that they will be looking at.