The ink has hardly dried on the agreement between the Ambani brothers to end their earlier ''non-compete'' pact as Mukesh Ambani of Reliance Industries Ltd has begun to muscle in on younger brother Anil Ambani's Anil Dhirubhai Ambani (ADAG) turf.

Reports today said that RIL is in talks to buy a majority stake in JM Financial Asset Management Pvt Ltd.

JM Financial, the money manager controlled by investment banker Nimesh Kampani, manages assets worth Rs8,569 crore in a total of 27 investment plans.

Negotiations are under way for a deal that values JM Financial at around 8 per cent of its assets under management, which equals Rs685 crore, said two newspapers citing unnamed company officials.

If the acquisition goes through at that valuation, it would be one of the biggest in India's mutual fund industry. However, both RIL and JM Financial have refused to confirm the reports.

The non-compete agreement, which was torn up in a move towards possible reconciliation between the brothers, had prevented Mukesh and Anil Ambani from entering each other's businesses. Anil Ambani controls Reliance Capital Asset Management Ltd, the country's largest money manager.

Despite the denials, JM Financial, Morgan Stanley's former partner in India, surged as much as 20 per cent in Mumbai trading early today.

''This is a speculative story. There is no truth in this,'' the Mumbai-based JM Financial said in an e-mailed statement today. ''JM Financial Mutual Fund forms an important part in the JM Financial Group portfolio and we remain focused and committed towards growing this business.''

Vishal Kampani, who was holding the position of a director in the asset management firm, resigned from his position on 12 March in favour of son Nimesh. On 14 March, the fund house informed investors of his resignation.

Bhanu Katoch, chief executive officer of JM Financial Asset Management, also called news of the attempted acquisition speculative in reply to an email from Mint.

''As a policy we don't comment on market speculation,'' Manoj Warrier, a spokesman for Reliance Industries Ltd said.

Anil Ambani owns the country's largest money manager, Reliance Capital Asset Management Ltd, which manages Rs110,000 crore in stocks and bonds.

India's mutual funds industry has grown fivefold in as many years, with assets under management swelling to Rs7,70,000 crore in April, according to data compiled by Bloomberg.

The estranged billionaire Ambani brothers, who split the family empire in 2005, earlier this month agreed to compete against each other for the first time, easing a dispute that stalled a power generation project and a telecommunications merger.

Mukesh and Anil Ambani, the world's richest siblings, scrapped all existing non-competition agreements between their business groups, and said they hoped ''very soon'' to negotiate a deal for supplies of natural gas from the Krishna-Godavari basin, India's largest field, controlled by RIL (See: Ambanis finally agree to dump old pact, start afresh).

The reported talks between Nimesh Kampani and Mukesh Ambani follow three years after Kampani sold his 49-per cent stake in the joint venture investment banking company JM Morgan Stanley Securities Pvt. Ltd to Morgan Stanley for $445 million (Rs2,069.25 crore as of today) (See: JM Financial, Morgan Stanley to split) . ''If a partner does not want to be with you, one has to move on,'' Nimesh Kampani said then.

JM Financial Asset Management is a loss-making entity in the otherwise profitable JM Financial group. Last year, the money manager made a loss of Rs5 crore. The company has been on the lookout for a buyer for a couple of months now, said a Livemint report.

Another report in The Economic Times suggested that RIL may also be interested in entering the telecommunications business, which was ADAG territory under the scrapped agreement.

For this, it may seek to buy out the Aditya Birla-controlled Idea Cellular, which has long been up for sale if the price is right, suggests the report. However, ET gives no firm basis for its speculation.