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The saga continues…of warring brothers, and their confused stakeholders!

The saga continues…of warring brothers, and their confused stakeholders! I am referring to the continued rivalry between the two Ambani brothers – Anil and Mukesh. And a leading news daily (almost all papers have carried it) has rightly called the fight a 'tug-of-gas'! In simple terms, the latest battle is between the first brother asking for a higher-than-originally-agreed-upon price for the gas that he will sell to the other, and the second refuting to pay the higher amount.

Now, the second brother (Anil) has got some reprieve as the Bombay High Court has asked the first brother (Mukesh) to sell gas at the originally agreed upon price, which is 44% lower than what he is asking for. This has caused a lot of uncertainty in India's nascent natural gas industry, and could potentially deliver a sharp blow to the fortunes of Mukesh-owned Reliance Industries (RIL).

While RIL had gone to the court to uphold the government-approved price of US$ 4.2 per mbtu (Million British Thermal Units) of gas, the court sanctified the lower price of US$ 2.34 per mbtu (which is also the price as per the original 2005-06 agreement between the brothers). While RIL is now said to be preparing itself to challenge the order before the Supreme Court, whatever be the decision, while one brother is going to benefit tremendously, the other is going to lose out significantly. At this time though, it's 'Advantage Anil'!

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