Andy Mukherjee is a Bloomberg Gadfly columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.

When other Indian tycoons were greedy, the richest of all was hesitant, even fearful. But now that most of his rivals have fallen on the swords of their debt-fueled hubris, Mukesh Ambani is preparing to pounce.

Ambani, 59, has all but completed massive investments in his petrochemicals empire, whose cash flows give him the firepower to promote and expand his new fourth-generation mobile service. He hopes to turn the network into a payments gateway: suddenly a very valuable proposition in a country where 86 percent of existing currency was outlawed by government diktat last month. 

Reliance Jio snagged 50 million mobile subscribers in 83 days. It's unclear whether that Facebook-beating growth can be sustained -- or become profitable -- when the service stops giving away free data sometime after March. What Ambani has managed to do is to push down per-user revenue for his competitors, which have been forced to cut prices. There's still no evidence he's taking market share away from Bharti Airtel Ltd., Vodafone Group Plc and Idea Cellular Ltd. Regardless, the trio are guaranteed an uneasy 2017.

Ambani Effect
Mobile data charges in India have fallen 30%-45% as incumbents got ready for launch of Reliance Jio
Source: Company reports

Reliance's biggest advantage is its balance sheet. During the pre-2008, liquidity-fueled boom for Indian businesses, Ambani stayed away from expensive deals of the kind that have returned to haunt India Inc.

A crucial bone of contention between Ratan Tata and Cyrus Mistry, who was fired as chairman of the Tata Group by the scion in October, was its 2006 acquisition of Corus Group Plc's British steel assets for $12.8 billion. That decision saddled the $103 billion salt-to-software conglomerate with debt and losses. With the Tata vs. Mistry spat showing no sign of abating, 2017 looks more likely to be a washout than a watershed for the group.

Kumar Mangalam Birla's commodities empire might pack a bit more punch next year, especially if the recovery in metals prices continues to benefit Novelis Inc., the U.S. aluminum maker that the billionaire Indian tycoon acquired in 2007 for $5.7 billion including debt, making it another of those overly optimistic global takeovers that didn't exactly go to plan.

Two Good Years
Ambani's Reliance has outperformed market-cap-weighted indexes of rival Indian conglomerates
Source: Bloomberg
*27 companies, including Tata Consultancy, Tata Motors, Tata Steel, Titan and Tata Power. *8 companies, including UltraTech Cement, Grasim Industries, Hindalco Industries, Idea Cellular, Aditya Birla Nuvo.

Still, Birla's cement business is bound to take a hit from the sudden disappearance of cash, which is squeezing the Indian property market. Besides, the 49-year-old is in the middle of a complicated merger of group companies. One consequence of that may be to expose shareholders of flagship Grasim Industries Ltd., a viscose staple fiber maker that also controls India's biggest cement company, to Idea Cellular. Given Jio's potential to upend India's mobile-phone industry in 2017, that exposure makes some shareholders and analysts nervous.

Fear of Ambani is being felt everywhere. Ahead of Jio's launch, Vodafone poured $7 billion into India in 2016 to retain its No. 2 position in the cutthroat mobile game. Billionaire Sunil Bharti Mittal is also plowing investment into his network, and offering free calls to match Reliance's onslaught.

But unless a clogging network and disillusioned customers devour his attention, expect Ambani to make his moves in two other areas. The first of them will be acquisitions. Now that he has more or less exhausted his organic investment options save a recently announced push in "cash-and-carry" retail, he has to think about what to do with the free cash flows, which are expected to turn positive from next year. 

While Waiting For Telecom
Refining and petrochemicals have propelled Reliance Industries' pre-tax income even as income from oil and gas vanished
Source: Bloomberg

Sure, he can return some to shareholders. But if he got a cheaply priced asset -- an enterprise value-to-Ebitda ratio of less than 3 was his father Dhirubhai Ambani's litmus test -- he could go for it. One obvious candidate would be once-estranged younger brother's Reliance Communications Ltd.'s 50 percent holding in a wireless carrier that's getting created as a result of a three-way merger. But there could well be others.

The second area to watch will be Mukesh Ambani's foray into the world of money. Indian banks were stuck at the bottom of a bad-debt hole even before Prime Minister Narendra Modi's shocking Nov. 8 decision to ban most banknotes. Moving a heavily cash-dependent economy to other payment modes will require millions of point-of-sale devices as well as widely accepted peer-to-peer payment networks.

Indian lenders might struggle to commit resources, but Ambani has already announced his plan to sign up at least 10 million merchants for Jio Money, his digital wallet. He also has a payments bank coming up. Given the Indian central bank's historic antipathy to letting conglomerates anywhere near banking, this is perhaps Ambani's biggest opportunity to own the oil that would grease India's commerce in the absence of cash. 

He may be tempted for no other reason than fondness for oil. After all, that's what his father pumped into ships docked at Aden before retiring home to found his empire. Even the brand name Jio, when placed in front of a mirror, reads "oil." Unless he slips on a major regulatory or political slick, Ambani might be as greedy in 2017 as he was coy in 2007.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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