Blog: Prime Minister Mukesh and his constituencies

Mukesh Ambani , at the 37th annual general meeting of the Reliance Industries Ltd, looked like a prime minister visiting his Lok Sabha constituency. He was connecting with his base, shaking hands with individual shareholders all across the Birla Matoshree Sabhaghar in Mumbai, and yet addressing a larger audience - who definitely matter more.

For one, the shareholding of the Indian public in the company has fallen over the years. Ten years back in March 2001, RIL's shareholding pattern filing on BSE showed the Indian public individual holding at 15.73 per cent (excluding GDRs). In March 2003, it was at 17.29 per cent. In 2011, the percentage of individual shareholding is down to 12.95 per cent.

On the other hand, the holding by foreign institutional investors seems to have peaked a few years back. FII holding in RIL was at 17.34 per cent a decade ago in March 2001, and is at very similar number of 17.70 per cent at the end of March 2011. However, in the end of September 2007, the shareholding of FIIs was 21.38 per cent and in December 2005, at 22.20 per cent.

So the most significant announcement that RIL chairman Mukesh Ambani made at the annual general meeting was about the company becoming debt-free by the end of 2011-12. The money ($7 billion) that the company will get by selling 30 per cent stake in its oil and gas blocks to BP will go to retire the company's debt on the balance sheet, which is a similar amount.

The Reliance scrip has been stagnating. In fact, the price stood at Rs 1064.60 after the company's 1:1 bonus shares were issued in November 2009. Today, the scrip closed at Rs 936.15.

Apart from the markets and the institutional investors, Mukesh Ambani also probably addressed the government from the podium of the annual general meeting. There's worry on the falling production at the KG D6 block in the Bay of Bengal. Ambani said, "After the government approvals for the BP-Reliance partnership, the KG D6 reservoir will be jointly assessed to address the technical issues in ramping up production." Message: Hurry up with the approvals. And of course he wants higher gas prices - but that was left unsaid.