Ambani wedding puts new spin on Indian business

Brookfield Infrastructure Partners LP

04/03/2024 02:41

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Pranav Kiran
       BENGALURU, March 4 (Reuters Breakingviews) - The wedding
celebrations of India's rich are worth watching closely. Anant
Ambani, a director of $243 billion Reliance Industries  RELI.NS 
and son of Chair Mukesh Ambani, held his three-day pre-nuptials
bash in Jamnagar, a small town in India's Gujarat state with
strict alcohol prohibition laws, over the weekend. He'll marry
in July. It answers Prime Minister Narendra Modi's call to shun
overseas destination weddings - but the prize for India is much
bigger than keeping the $50 billion domestic industry onshore.
    Indian weddings can be expensive spectacles and society
events. The Ambani celebrations are no exception. Guests
including Reliance's top investors and business partners, such
as bosses of global companies like Meta's  META.O  Mark
Zuckerberg, Brookfield Asset Management's  BAM.TO  Bruce Flatt
and Murray Auchincloss of BP  BP.L , were treated to a
performance by pop superstar Rihanna and 500 dishes created by
100 chefs in a jungle-themed jamboree, per Reuters. Reliance's
telecom unit Jio Platforms counts Meta-owned Facebook as a big
shareholder; the sprawling conglomerate has also teamed up with
Brookfield Infrastructure  BIP.N  to build data centres and BP
for petrol stations across the country. 
    The executives are inadvertently showcasing Modi's desire to
keep wealth at home. "If we celebrate the festivities of
marriages on Indian soil, amid the people of India, the
country's money will remain in the country," the prime minister
told listeners of his monthly radio programme in November.
Ambani's daughter, also a member of the company's board, had her
engagement party in Italy in 2018.
    It's the latest sign of India's rising economic nationalism.
In January, Modi travelled to Lakshadweep to promote the
tropical islands off the coast of Kerala as an alternative to
the Maldives, which is popular among Indians, who already face
restrictions on taking money overseas. Encouraging them to spend
more at home can help to avert economic headaches. The
government frequently tries to curb their desire to buy imported
gold as part of its effort to keep the country's current account
deficit in check. 
    In his plea over weddings and tourism, Modi also may have
one eye on supporting the Reserve Bank of India's efforts to
protect the rupee and, by extension, India's attractiveness as
an investment destination. The currency has depreciated at an
annual rate of 2.9% against the dollar over the last 10 years
and that raises the rate of return global investors seek on
their investments.
    That is the real prize. India's economy is growing fast but
foreign direct investment that can help to create jobs isn't
keeping up. The central bank uses some of its $619 billion of
foreign exchange reserves to keep the currency in a tight range,
though India insists it isn't intervening excessively.
   For now, Modi's pleas underscore a tailwind: India's large
and growing pool of captive capital. This helps to prop up the
stock market at persistently high valuations. The MSCI India
Index trades at 22 times forward earnings, twice as expensive as
other emerging markets. That gives guests at the Ambani wedding
something extra to cheer. 
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    CONTEXT NEWS
    A three-day pre-wedding celebration for Anant Ambani, son of
Reliance Chair Mukesh Ambani, began on March 1 in a township in
Jamnagar near Reliance's main oil refinery in the western state
of Gujarat, Reuters reported on March 2.
    "These days a new milieu is being created by some families
to go abroad and conduct weddings. Is this at all necessary? If
we celebrate the festivities of marriages on Indian soil, amid
the people of India, the country's money will remain in the
country," Indian Prime Minister Narendra Modi said on Nov. 26.
    


 (Editing by Una Galani and Katrina Hamlin)
 ((For previous columns by the author, Reuters customers can
click on  KIRAN/ 
pranavkiran.t@thomsonreuters.com; Reuters Messaging:
pranavkiran.t@thomsonreuters.com@reuters.net))