Mukesh Ambani's Reliance Industries, recently freed from a pact that banned it from competing with his brother's firms, unveiled a push into the power sector that gave little detail at a hotly anticipated shareholder meeting.

Ambani has been avidly pursuing entry into markets that his younger brother, Anil is in, ever since the long-estranged siblings ended their agreement last month not to compete directly with each other. Mukesh told Reliance Industries shareholders the end of the agreement opened up possibilities in a power sector that provided "unbounded opportunity." However, investors were disappointed that Mukesh, the world's fourth-richest man, did not announce more specific plans and that Anil was not in at the meeting.

"People had built unrealistic expectations that there would be big-bang announcements at the meeting," said Tejas Doshi, head of research at Sushil Finance in Mumbai. Reliance shares, which had gained as much as 1.7% ahead of the meeting, ended 1.5% lower, underperforming the main Sensex index. While many equity analysts welcomed the diversification plan, some portfolio analysts said Reliance Industries should stick to its main oil and gas business.

"I would rather see them spending to buy oil assets than going into other areas," said Helsinki-based Taina Erajuuri, a portfolio manager at FIM India, which manages $150 million of Indian stocks, including Reliance Industries.

Anil's Reliance Communications, Reliance Natural Resources and Reliance Power, with which Mukesh will be competing, also skidded and were the most active large stocks on the Bombay Stock Exchange. Reliance Industries recently made a dramatic return to the telecom business with the $1 billion acquisition of Infotel Broadband, the only company to win a nationwide licence for broadband wireless spectrum in a government auction of three licenses.

The Times of India reported on Friday that Reliance Industries was in talks to buy the tower and fiber optics units of Anil's debt-strapped Reliance Communications, which closed down 3.6%. Reliance is also keen to enter the financial and health sectors, sources have said. Mukesh Ambani also said the company planned to expand its presence in the U.S. shale gas business, build a coke gasification facility in India, and expand its retail business. The energy-based conglomerate plans to bid for so-called ultra mega power projects - those exceeding 4,000 megawatts - in India, he told shareholders after arriving at the meeting with his wife Nita and mother Kokilaben.

Brotherly Harmony, But No Deal

Ambani said he looked forward to a constructive relationship with his brother's Reliance ADAG group, and was ready to provide it with natural gas. The brothers split their father Dhirubhai's empire five years ago after disagreeing over ownership. However, he did not say anything about a new gas deal with his brother, sending shares in Anil's Reliance Natural Resources down 7.5%.

The Supreme Court said in May the brothers had until this week to renegotiate the terms of their gas supply agreement and to abide by the government's price, which is nearly double the price they had agreed on in 2005. The brothers split their father Dhirubhai's empire five years ago after disagreeing over ownership. Speculation that the brothers may finally do business together again, however, remained just that. "People had expected a Bollywood kind of a reunion between the two brothers at the meeting," said Arun Kejriwal, director of research firm KRIS.

Power Play

Reliance Industries, which has nearly 219 billion rupees ($4.7 billion) in cash, is entering a period of heavy investment, said Jagannadham Thunuguntla, head of equity at SMC Capitals.

"I expect them to do a series of treasury share sales in the next six to eight months. So easily you are talking about $7 billion to $7.5 billion in ammunition," Thunuguntla said.

India is chronically short of power, and scrapping the non-compete pact means Reliance is now free to build electricity generation except for merchant power based on natural gas, an area in which the brothers have agreed to continue not to compete.

"We are drawing up specific plans for mega investments in the sector with clean coal-based power generation projects, hydel (hydro-electric) projects and also in nuclear power as and when it is opened up," Mukesh said.

Reliance has resources and capability to be a force in Indian power, but FIM India's Erajuuri said she was sceptical.

"There is, no doubt, a power deficit in India at the moment, but everybody is building assets, and the question is how much you are going to get in merchant power. Eventually, the merchant power prices will come down," Erajuuri said.