Like you, I’ve been wondering what the splash of those dandiya pictures of the Ambani bahus is all about. Is it just pure emotions at play? Unlikely!

Is there more brewing, despite the initial thumbs down from the stock market? Yes!

For a fast forward on a clear business rationale of a reunion (evident in this Reliance statement), I've been pointed to look for clues in the mobile tower business.

For those coming in late, Anil Ambani owns some 50,000 of them. He's been wanting to sell the portfolio and raise cash.
 
A leasing tango with elder brother Mukesh will help Anil get a better price from US private equity (PE) firms Carlyle Group LP and Blackstone Group LP. In this game, valuations ride on potential future earnings. Lease deals are a key element. (It is possible that both Caryle and Blackstone buy a stake.)

After termination of a non-compete agreement with Anil’s companies, Mukesh’s RIL has been planning to lease around 26,000 towers. An interesting source of infrastructure can be Anil's Reliance Communications. Mukesh can then carry data traffic on Anil's pan-India 2.8 lakh fiber optic network, the largest in the sector. Apart from using RComs' towers, RIL can use the optic fiber network and transmission facilities such as national and international long distance networks to carry data traffic.

The talks, we're told, have been anchored by Blackstone's Akhilesh Krishna Gupta, the firm’s senior MD of Indian operations since May 2005.

Gupta is a celebrated dealmaker and his dharma is to source and manage private equity transactions. What needs reminding is that Gupta served as the CEO of corporate development at RIL and Reliance Infocomm, as well as Reliance Insurance. Also, he developed an exploration strategy which culminated in the announcement of a 14 TCF gas field (this estimate was later lowered), besides co-anchoring the acquisition of Flag Telecom, and the foray for Mukta-Panna-Tapti Oil. He also wrote the famous email to Mukesh protesting against the controversial routing of calls via the US to sidestep access deficit charges.

Despite the email getting leaked and embarrassing key satrap Manoj Modi, the Ambani-Gupta relationship survived, partly because their friendship goes back to their Stanford MBA days. In fact, when Gupta, a former Lever man, came to work in Reliance (he worked in Strategic Planning Associates and ICF in Washington DC, then as a principal undertaking leveraged buyouts and roles within buyout companies, followed by Krauses Sofa and Stylus Inc), he was the first executive to live with the Ambani family!

Evidently, Gupta has emerged uniquely qualified to get both brothers (and senior interlocutors Modi and Modi’s brother-in-law Jyotindra Thaker) on the table over RIL using RCom's access systems, fiber-optic backbone, international cable systems and internet gateways to provide high-speed data services.

Reliance Communications holds about 95% of Reliance Infratel, with FIIs including the Galleon Group, George Soros' Quantum Ltd., Drawbridge Towers Ltd. and HSBC Iris Investments (Mauritius) Ltd. holding the rest. Gupta’s back-channel nirvana lies in an agreement over the valuation of the unlisted tower unit as well as lease agreements with telecom operators. A sale of the tower asset would help Anil reduce about $6 billion of debt, which has been eating into his earnings for several quarters. The debt was taken to expand services as well as pay the government to acquire licenses and bandwidth for 3G services in 2010. High interest rates and a decline in the value of the rupee multiplied Anil’s debt problems since a large chunk is dollar denominated. Sales efforts–including two attempts at an IPO– have failed and a merger with rival GTL Infrastructure, owned by Manoj Tirodkar, fell through last September.
 
Anil reportedly values the tower business at about $4 billion. Valuations could range between Rs 35 lakh to Rs 45 lakh a tower, depending on rentals, thus valuing the company between $3.29 billion and $3.76 billion. In September, he told shareholders that Reliance Infratel could be announcing India's largest private-equity deal, the largest being in December 2007 when Temasek Holdings, Investment Corp. of Dubai, Goldman Sachs, Macquarie, AIF Capital, Citigroup and India Equity Partners bought a stake in Bharti Infratel Ltd., the tower arm of Bharti Airtel, for about $1 billion.

For the deals he’s made, Gupta is a director of NCC Ltd (formerly Nagarjuna Construction Company), Jagran, Gokaldas Exports, Emcure Pharma, AllCargo Global Logistics, CMS Computers, Intelenet Global Services, MTAR Technologies, Monnet, Moser Baer, and SKR BPO.

Mukesh acquired Infotel, a company that won pan-India spectrum for broadband wireless access, and plans commercial operations in mid 2012.