By Paranjoy Guha Thakurta India economic analyst in Delhi

The Ambani brothers, Mukesh (r) and Anil (l), parted after a seven-month-long battle

India's biggest privately - controlled corporate conglomerate, the Reliance group, promoted by the Ambani family, is going to be divided down the middle.

The mother of the two battling Ambani brothers announced a deal on Saturday to carve up a diversified business empire that had been founded by her husband Dhirubhai Ambani who died three years ago without leaving a will.

On Monday, stock exchange indices jumped to record levels led by a rise in the values of Reliance group blue-chips.

Investors and politicians rejoiced at the decision of the two Ambani brothers, Mukesh (47) and Anil (45), to part ways because it signalled a truce that had been preceded by an acrimonious dispute over ownership and control of assets - played out in the full glare of the media over seven months.

The sibling rivalry at one stage threatened to cripple the working of a diversified business group with interests in many industries: from synthetic fibres and textiles to telecommunications, petrochemicals, petroleum refining, oil and gas exploration, insurance and financial services.

Anil (left) with Bollywood stars Aishwarya Rai and Amitabh Bachchan

It has been decided that Mukesh will henceforth control the group's synthetic fibres, petrochemicals and refining operations, while Anil would look after the group's interests in telecom, energy and financial services.

The Reliance group of companies was founded by Dhirubhai Ambani, the second son of a poor schoolteacher in a nondescript village in Gujarat in western India.

He had started his career in 1958 as a clerk in a petrol station in Aden. The industrial empire he set up currently boasts of India's largest - and the world's fifth largest - petroleum refinery.

Controversial

The late entrepreneur was a colourful and controversial man.

At one level, he convinced over three million middle-class Indians to invest in his companies and he rewarded them handsomely.

At the same time, Dhirubhai, who was close to important politicians and bureaucrats, was frequently accused of manipulating the stock markets and bending India's infamously complicated tax laws.

In 69 years, he built from scratch India's largest private industrial empire.

When he passed away in July 2002, the Reliance group had an annual turnover in the region of $15bn or roughly 3% of the country's gross domestic product.

The group also pays one-tenth of the Indian government's total collection of indirect taxes.

Dhirubhai's two sons were a study in contrast.

The elder Mukesh was conservative and reticent, while the younger Anil loved the company of film personalities and politicians - in fact, the latter is a member of India's upper house of parliament.

Soon after their father died, the brothers started squabbling.

Media battle

The dispute did not, however, attract public attention till November when Mukesh told a television reporter that there were certain "ownership issues" in the "private domain" that remained unresolved.

Subsequently, the media went to town and hardly a day passed when some aspect of the dispute or the other did not make headlines.

Oil is only one of a huge range of Reliance concerns

Confidential e-mail messages and internal boardroom documents were systematically leaked to journalists by individuals close to the two brothers that indicated that Mukesh and Anil were bitterly battling over who was the "real boss" of the group's flagship, Reliance Industries Limited.

Various group firms are embroiled in controversies.

Reliance Infocomm, which provides telecom services, is currently involved in a messy legal dispute with two public sector telecom companies that have accused the company of illegally disguising international phone calls as local ones to cheat the exchequer.

The government levied a hefty fine on the firm which it paid up.

Now that the battling brothers have decided to bury the hatchet, a moot question is whether the divided group would be able to expand as fast as the undivided group was able to.

Mukesh Ambani is said to be a conservative, reticent workaholic

One view is that the two brothers would focus their energies on their respective businesses rather than on fighting each other.

The contrary view is that by breaking up, the Reliance group would have lost some of its synergy - for instance, gas produced by a company in the Mukesh faction is meant to be utilised by a power plant being set up by a firm headed by Anil.

Mukesh has obtained control over a bigger chunk of the undivided group's assets and operations.

The businesses he runs are those in which the Reliance group has longer experience and bigger market shares.

Ironically, Anil would be heading the telecom firm against whose functionaries he had himself levelled a host of allegations.

What has been decided are the broad contours of a settlement. Details would have to be worked out.

Lawyers and accountants representing the Ambani brothers are expected to spend months finalising valuations of firms and share-swaps to facilitate the disentanglement of cross-holdings.

Control over hundreds of closely-held satellite firms, investment companies, trusts and so on would also need to be settled.

The bickering may not end in a hurry.

But hopefully, it would now take place behind closed doors and not in public.