Ambani Case Study

P.O.M. CASE STUDYP.O.M. CASE STUDY

LEADERSHIP AND CHANGE LEADERSHIP AND CHANGE MANAGEMENTMANAGEMENT

GROUP MEMBERSGROUP MEMBERS

GAYATHRI SHIVARAMGAYATHRI SHIVARAM

ZUBAIR SIDDIQUEZUBAIR SIDDIQUE

MINAY MEHTAMINAY MEHTA

TANVI NAIKTANVI NAIK

SNEHA MOITRASNEHA MOITRA

SNIGDHA MOITRASNIGDHA MOITRA

SAMEERA SANJAYSAMEERA SANJAY

AKSHAY VASANAKSHAY VASAN

DHIRUBHAI AMBANI & DHIRUBHAI AMBANI & RELIANCERELIANCE

HE BUILT AN EMPIRE THAT IS HE BUILT AN EMPIRE THAT IS ROCK SOLID AND HE WILL ROCK SOLID AND HE WILL ALWAYS REMAIN AN ICONALWAYS REMAIN AN ICON

PERFECT COMBINATION OF PERFECT COMBINATION OF ENTERPRENEURSHIP & LEADERSHIPENTERPRENEURSHIP & LEADERSHIP

He transformed Reliance from a company He transformed Reliance from a company with a turnover of 640 million in 1976 to with a turnover of 640 million in 1976 to one with 620 billion in 2002.one with 620 billion in 2002.

Starting with a small textile mill in Naroda, Starting with a small textile mill in Naroda, in 1966, he took Reliance to various areas in 1966, he took Reliance to various areas like – like –

- Petrochemicals, polyester filament yarn, - Petrochemicals, polyester filament yarn, oil and gas exploration and production, oil and gas exploration and production, refining and marketing of petroleum, refining and marketing of petroleum, textiles, power, telecom services, textiles, power, telecom services, information management and financial information management and financial services.services.

NEVER FOLLOWED TEXTBOOK NEVER FOLLOWED TEXTBOOK STYLE OF MANAGEMENTSTYLE OF MANAGEMENT

Instead he evolved a unique style – Instead he evolved a unique style – which combined the American style which combined the American style of entrepreneurship, with Japanese of entrepreneurship, with Japanese focus on technology – focus on technology – to this he to this he added the innate shrewdness of a added the innate shrewdness of a Gujarati businessmanGujarati businessman

A perfect manager of time, money A perfect manager of time, money and men; exhibited a passion to and men; exhibited a passion to find solutions to problems.find solutions to problems.

When there were most govt. owned When there were most govt. owned companies and they gave private players companies and they gave private players were given a step motherly treatment in were given a step motherly treatment in issuing licenses and permits.issuing licenses and permits.

Most of the companies depended on govt. Most of the companies depended on govt. owned financial institutions for funds, he owned financial institutions for funds, he raised capital from public by offering raised capital from public by offering shares of his companies.shares of his companies.

DHIRUBHAI STARTED RELIACE DHIRUBHAI STARTED RELIACE

GETTING STARTED: -GETTING STARTED: -

Dhirubhai was born on Dec 28Dhirubhai was born on Dec 28thth 1932 to 1932 to Hirachand Govardhandas Ambani and Hirachand Govardhandas Ambani and Jamunaben Ambani.Jamunaben Ambani.Having done matriculation in in 1949, he Having done matriculation in in 1949, he left for Aden at the age of 17left for Aden at the age of 17His first job – fill gas and collect money at His first job – fill gas and collect money at Shell petrol station, earning Rs. 300 / monthShell petrol station, earning Rs. 300 / monthWithin a few years he rose to a position of Within a few years he rose to a position of sales manager.sales manager.Having worked for 8 years there he decided Having worked for 8 years there he decided to return to India to start his own business.to return to India to start his own business.

BUILDING RELIANCEBUILDING RELIANCE

On Dec 31, 1958 he retuned to On Dec 31, 1958 he retuned to Mumbai and started Reliance Mumbai and started Reliance Commercial Corporation (RCC) with a Commercial Corporation (RCC) with a borrowed capital of Rs. 15000borrowed capital of Rs. 15000

RCC mainly involved exporting RCC mainly involved exporting commodities like ginger, cardamom, commodities like ginger, cardamom, turmeric and cashew nut.turmeric and cashew nut.

Using his connections in Aden he Using his connections in Aden he exported a wide range of exported a wide range of commodities therecommodities there

BUILDING RELIANCEBUILDING RELIANCE How did he switch to textiles? How did he switch to textiles?

In mid 1960’s Govt. of India (GOI) In mid 1960’s Govt. of India (GOI) introduced an export promotion scheme – introduced an export promotion scheme – The earnings from the export of rayon The earnings from the export of rayon fabrics could be used for import of nylon fabrics could be used for import of nylon fiberfiberThis attracted him and he switched from This attracted him and he switched from spices to textilesspices to textilesIn 1966, he set up spinning mill at Naroda In 1966, he set up spinning mill at Naroda with borrowed funds of Rs.280000with borrowed funds of Rs.280000This was registered Reliance Textile This was registered Reliance Textile Industries as a powerloom unit with paid Industries as a powerloom unit with paid up capital of Rs.150000up capital of Rs.150000

Another program of GOI, HIGH UNIT VALUE Another program of GOI, HIGH UNIT VALUE SCHEME, gave tremendous boost to the SCHEME, gave tremendous boost to the company – company –

It allowed import of polyester filament yarn It allowed import of polyester filament yarn against export of nylon fabrics. against export of nylon fabrics.

RCC benefited most from this scheme and its RCC benefited most from this scheme and its exports constituted more than 60% of exports exports constituted more than 60% of exports under this scheme.under this scheme.

There were rumors that this scheme was There were rumors that this scheme was solely devised for Dhirubhai, but denied all the solely devised for Dhirubhai, but denied all the allegations , saying that allegations , saying that he took advantage of he took advantage of the scheme when others kept their eyes shut, the scheme when others kept their eyes shut, and when there was such a large margin of and when there was such a large margin of profit they should have taken its advantageprofit they should have taken its advantage


VIMAL – THE BRANDVIMAL – THE BRANDThe High Unit Value Scheme ended in 1978, The High Unit Value Scheme ended in 1978, so he then focused on domestic market, so he then focused on domestic market, where Reliance Textiles was not very well where Reliance Textiles was not very well knownknownHis first priority to create a strong brand His first priority to create a strong brand image for Vimal under which RTI sold its image for Vimal under which RTI sold its fabrics in India to win the customer’s fabrics in India to win the customer’s confidenceconfidenceHe launched advertising campaigns, and He launched advertising campaigns, and also took steps to develop an efficient also took steps to develop an efficient distribution system, as he found that existing distribution system, as he found that existing marketing channels were inadequate.marketing channels were inadequate.


PROBLEMSPROBLEMSReliance faced a lot of resistance from Reliance faced a lot of resistance from traditional cloth merchants, in the traditional cloth merchants, in the domestic marketdomestic marketConfronted with the situation, Dhirubhai Confronted with the situation, Dhirubhai decided to move away from traditional decided to move away from traditional wholesale trade and open his wholesale trade and open his showrooms to tap new marketsshowrooms to tap new marketsHe appointed several agents from non-He appointed several agents from non-textile backgroundstextile backgroundsHe adopted the concept of company He adopted the concept of company stores from its main competitor, Bombay stores from its main competitor, Bombay Dyeing and pursued it on a grand scaleDyeing and pursued it on a grand scale


he toured the entire country offering he toured the entire country offering franchises to shareholders.franchises to shareholders.

He promised to provide financial and He promised to provide financial and advertising supportadvertising support

In search of high volumes he identified In search of high volumes he identified a new market segment – non-metro a new market segment – non-metro urban segmenturban segment

Thus by 1980, Reliance fabrics were Thus by 1980, Reliance fabrics were available all over India through 20 available all over India through 20 company owned retail outlets and over company owned retail outlets and over 1000 franchised outlets, and over 1000 franchised outlets, and over 20000 retail stores20000 retail stores


Vertical IntegrationVertical IntegrationIt describes a style of ownership and controlIt describes a style of ownership and control

The degree to which a firm owns its upstream supplies The degree to which a firm owns its upstream supplies and its downstream buyers determines how vertically and its downstream buyers determines how vertically integrated it is.integrated it is.

These kind of companies are united through a These kind of companies are united through a hierarchy and share a common owner.hierarchy and share a common owner.

Each member of hierarchy produces different products Each member of hierarchy produces different products or service and the products are combined to satisfy a or service and the products are combined to satisfy a common need.common need.

Its is a contrast of horizontal integrationIts is a contrast of horizontal integration

One method of avoiding the hold –up problem.One method of avoiding the hold –up problem.

Monopoly produced through this method is called Monopoly produced through this method is called vertical monopoly.vertical monopoly.

It is more appropriate to call it a cartelIt is more appropriate to call it a cartel

Backward Vertical IntegrationBackward Vertical Integration

The company sets up subsidiaries that The company sets up subsidiaries that produce some of the raw materials produce some of the raw materials used in the production of its products.used in the production of its products.

Control of these subsidiaries is Control of these subsidiaries is intended to create a stable supply of intended to create a stable supply of inputs and ensure a consistent quality inputs and ensure a consistent quality in their final product that they make.in their final product that they make.

It is mainly done to minimize costs by It is mainly done to minimize costs by centralizing the production of final centralizing the production of final product and its inputs.product and its inputs.

Start of IntegrationStart of Integration

To setup a To setup a polyester filament polyester filament yarn (PFY) at yarn (PFY) at Patalganga(1981)Patalganga(1981)

To make it a world To make it a world class plant class plant equipped with the equipped with the best machinery best machinery and having best and having best facilitiesfacilities

Technology was sourced from USA’s Du Technology was sourced from USA’s Du Pont De NemoursPont De Nemours

Dhirubhai had no intentions of making it Dhirubhai had no intentions of making it an equity partner.an equity partner.

He thought that since the tech was easy He thought that since the tech was easy available in the international market available in the international market there was no need for it.there was no need for it.

Even though the demand being Even though the demand being 6000tpa, he built a 10,000 tpa plant that 6000tpa, he built a 10,000 tpa plant that too with a built in expansion capacity of too with a built in expansion capacity of 15000tpa15000tpa..

ProblemProblemThe govt. took a decision to reserve The govt. took a decision to reserve PFY for small scale weavers.PFY for small scale weavers.

There was a considerable decline in There was a considerable decline in demand. demand.

Cauz of which the bigger mills were Cauz of which the bigger mills were compelled to use cotton. compelled to use cotton.

SolutionSolution

Dhirubhai announced a buyback Dhirubhai announced a buyback scheme.scheme.

According to it," Reliance will sell its According to it," Reliance will sell its “Recron” brand of yarn to powerlooms. “Recron” brand of yarn to powerlooms. These powerlooms would then sell the These powerlooms would then sell the grey cloth back to the company for grey cloth back to the company for finishing and eventual sale under the finishing and eventual sale under the ““VIMAL”VIMAL” brand name. brand name.

Sideways integrationSideways integration

Manufacture of Manufacture of linear alkyl benzene linear alkyl benzene (LAB)(LAB)

Thermoplastics like Thermoplastics like poly vinyl chloride poly vinyl chloride (PVC), high density (PVC), high density poly ethylene poly ethylene (HDPE), low density (HDPE), low density poly ethylene (LDPE)poly ethylene (LDPE)

- Detergent - Detergent manufacturersmanufacturers

- Plastic processors- Plastic processors

Petrochemical intermediaries Petrochemical intermediaries like paraxylene, n-paraffin and like paraxylene, n-paraffin and mono ethylene glycol (MEG) and mono ethylene glycol (MEG) and ethylene which are the basic ethylene which are the basic raw materials for all petro raw materials for all petro products and intermediaries.products and intermediaries.

And finally it entered in to And finally it entered in to production and extraction of oilproduction and extraction of oil

Most cherished Most cherished projectproject

At Hazira in At Hazira in 19911991

To build the To build the largest multi-largest multi-feed ethylene feed ethylene cracker plant cracker plant in the world.in the world.

Largest refinery-JamnagarLargest refinery-Jamnagar

Commissioned in 1999.Commissioned in 1999.

Capacity of 27 million tpa.Capacity of 27 million tpa.

Single largest investment ever mad Single largest investment ever mad at a single location in Indiaat a single location in India

Besides the refinery , the plant included:Besides the refinery , the plant included:

-India's largest port terminal-India's largest port terminal

-fully automated rail-road loading-fully automated rail-road loading

-Product dispatch terminal-Product dispatch terminal

-3.5 million tank farm-3.5 million tank farm

-500 MW power plant-500 MW power plant

-12 mgd sea water desalination plant-12 mgd sea water desalination plant

-10 GB IT network connecting 50 -10 GB IT network connecting 50 servers and 2500 terminals with 200 km servers and 2500 terminals with 200 km long optic fibre cables.long optic fibre cables.

This plant accounts for 25% of India’s This plant accounts for 25% of India’s total refining capacity. total refining capacity.

Characteristics:-Characteristics:-

Continuous vertical integrationContinuous vertical integration

Consolidation of internal capabilities Consolidation of internal capabilities generated through horizontal generated through horizontal diversificationdiversification

Efforts to compete this integration Efforts to compete this integration through investment in NGL/naphtha through investment in NGL/naphtha cracker and in oil extraction itself.cracker and in oil extraction itself.

STOCK MARKET ADVENTURE STOCK MARKET ADVENTURE

THOROUGH REVOLUTIONISTTHOROUGH REVOLUTIONIST

Having understood the psychology of Indian Having understood the psychology of Indian capital markets & mindset of Indian investors he capital markets & mindset of Indian investors he introduced the Equity Culture in Indiaintroduced the Equity Culture in India

He gave importance to middle class investors He gave importance to middle class investors and by doing so he involved millions of middle and by doing so he involved millions of middle class investorsclass investors

Reliance went public in 1977, and had its first Reliance went public in 1977, and had its first AGM in the same year, it had 58000 investorsAGM in the same year, it had 58000 investors

Its investor base was so large that at times Its investor base was so large that at times executives had to go to small cities with share executives had to go to small cities with share certificates and such other correspondence and certificates and such other correspondence and post them locallypost them locally

Reliance holds record for bringing out Reliance holds record for bringing out the single largest domestic issue of the single largest domestic issue of more than Rs.21 billion in convertible more than Rs.21 billion in convertible bonds for Reliance Petroleum in bonds for Reliance Petroleum in 1993.1993.

Marketing capitalization of Reliance –Marketing capitalization of Reliance –

1980 – 1.2 billion1980 – 1.2 billion

1990 – 9.96 billion1990 – 9.96 billion

1995 – 96.2 billion1995 – 96.2 billion


The end of High Unit Value Scheme of The end of High Unit Value Scheme of 1978 brought a dip in profits of Reliance; 1978 brought a dip in profits of Reliance; in spite of this Dhiru declared a dividend in spite of this Dhiru declared a dividend of 27%.of 27%.

Whenever in need of money, Dhirubhai Whenever in need of money, Dhirubhai opted for public issueopted for public issue

From 1979-1982 it brought out issues for From 1979-1982 it brought out issues for different purposes like – financing a different purposes like – financing a worsted spinning mill, modernizing its worsted spinning mill, modernizing its already existing textile mill, etc. and to already existing textile mill, etc. and to overcome bear syndicate prices overcome bear syndicate prices respectively.respectively.


IN 1979 Reliance introduced an IN 1979 Reliance introduced an innovative – the partially convertible innovative – the partially convertible debentures.debentures.

In spite of it being difficult to gain In spite of it being difficult to gain permission from controller of special permission from controller of special issues, due to his constant lobbying he issues, due to his constant lobbying he gained acceptance for the samegained acceptance for the same

This issue was over subscribed 6 times This issue was over subscribed 6 times and soon convertible debentures (partial and soon convertible debentures (partial and whole) became instruments of choiceand whole) became instruments of choice

The 1982 issue generated Rs. 500 The 1982 issue generated Rs. 500 million, the biggest in those daysmillion, the biggest in those days


STOCK MARKET ADVENTURESTOCK MARKET ADVENTURE

On march 18, 1982 a bear syndicate from On march 18, 1982 a bear syndicate from Calcutta sold 1.1 million Reliance shares Calcutta sold 1.1 million Reliance shares worth Rs.160 million in bulkworth Rs.160 million in bulkThis was all a part of a planned shortselling This was all a part of a planned shortselling strategy to buy the same shares at a strategy to buy the same shares at a cheaper rate making considerable profitscheaper rate making considerable profitsThen Dhirubhai’s loyal brokers bought back Then Dhirubhai’s loyal brokers bought back all the shares, which led to an increase in all the shares, which led to an increase in share priceshare priceA company could not buy its share, so a co. A company could not buy its share, so a co. in the name of “friends of Reliance in the name of “friends of Reliance Association” was registered, it bought Association” was registered, it bought 8,57,000 shares out of the total 1.1 million 8,57,000 shares out of the total 1.1 million shares sold by Reliance.shares sold by Reliance.

STOCK MARKET ADVENTURESTOCK MARKET ADVENTUREAfter this incident he was waiting to take revenge After this incident he was waiting to take revenge on the bear syndicate.on the bear syndicate.

The Association which bought the shares, sought The Association which bought the shares, sought delivery on 30delivery on 30thth April ’82, a Friday, which the bear April ’82, a Friday, which the bear syndicate did not havesyndicate did not have

So it asked for more time which the association So it asked for more time which the association refused and demanded Rs.50 a Badla charge refused and demanded Rs.50 a Badla charge

Exchange parties tried in vain to bring about a Exchange parties tried in vain to bring about a compromise between the 2 partiescompromise between the 2 parties

Then began the panic of buying Reliance shares, Then began the panic of buying Reliance shares, and the prices were at an all time highand the prices were at an all time high

By May 10By May 10thth crises ended, and Dhirubhai finally crises ended, and Dhirubhai finally succeeded in taming the bullsucceeded in taming the bull

CORPORATE BATTLESCORPORATE BATTLESCRITICISMS CRITICISMS

Dhirubhai was considered to be a manipulatorDhirubhai was considered to be a manipulator

Accused for using “more than the usual” ways of Accused for using “more than the usual” ways of obtaining licenses, getting quick approvals for obtaining licenses, getting quick approvals for public issues and capital goods imports, and for public issues and capital goods imports, and for getting policies formulated in favor of Reliancegetting policies formulated in favor of Reliance

Reliance was known to engage politicians, Reliance was known to engage politicians, journalists and others to increase the sphere of journalists and others to increase the sphere of influenceinfluence

Some businessmen described Reliance as Some businessmen described Reliance as “an “an out of control monster, a bubble that would out of control monster, a bubble that would burst any moment”burst any moment”

CORPORATE BATTLESCORPORATE BATTLESANSWERS TO THEMANSWERS TO THEM

Not all analysts agree to all that; they felt – Not all analysts agree to all that; they felt – Dhirubhai was quick to recognize and exploit Dhirubhai was quick to recognize and exploit opportunities, who believed that “opportunities, who believed that “business is business is nothing but a web of relationships and obligations”nothing but a web of relationships and obligations”Keeping this in mind he created favorable centers Keeping this in mind he created favorable centers among the most important areas where power among the most important areas where power vested – vested – Bureaucrats, Ruling Politicians, MediaBureaucrats, Ruling Politicians, MediaHis amazing ability to make the best use of the His amazing ability to make the best use of the state and its policies was responsible for expansion state and its policies was responsible for expansion of Relianceof RelianceHe believed that business was not all about ethics He believed that business was not all about ethics and morality; it was about expansion and successand morality; it was about expansion and success

CORPORATE BATTLESCORPORATE BATTLESTHE FIGHT (DHIRUBHAI V/S NUSLI WADIA)THE FIGHT (DHIRUBHAI V/S NUSLI WADIA)

Both were known to use their business and political Both were known to use their business and political connections to suit their endsconnections to suit their ends

During Janata Party rule (1977 – 1979), Nusli Wadia During Janata Party rule (1977 – 1979), Nusli Wadia got permission to build a 60000 tpa (DMT) plant.got permission to build a 60000 tpa (DMT) plant.

But before the intent letter was converted into But before the intent letter was converted into license, Congress came into rule and his license license, Congress came into rule and his license was delayed to 1981was delayed to 1981

At the same time Dhirubhai obtained license to At the same time Dhirubhai obtained license to build a PTA plant.build a PTA plant.

This infuriated Nusli Wadia and marked the This infuriated Nusli Wadia and marked the beginning of one of the major battles in history of beginning of one of the major battles in history of Indian business – which lasted for yearsIndian business – which lasted for years

CORPORATE BATTLESCORPORATE BATTLES

THE FIGHT (DHIRUBHAI V/S GOENKA)THE FIGHT (DHIRUBHAI V/S GOENKA)

IN 1980’s Ramnath Goenka, proprietor of IN 1980’s Ramnath Goenka, proprietor of Indian Express Group tried often to act as a Indian Express Group tried often to act as a mediator to solve conflict between Nusli and mediator to solve conflict between Nusli and Dhirubhai, but in vainDhirubhai, but in vain

He considered him his son and urged He considered him his son and urged Dhirubhai to end their rivalry; Dhirubhai made Dhirubhai to end their rivalry; Dhirubhai made promises that were false and continued his promises that were false and continued his fightfight

Goenka felt betrayed and then he started a Goenka felt betrayed and then he started a series of press campaigns and assaults against series of press campaigns and assaults against Dhiru, amidst which he had his first stroke in Dhiru, amidst which he had his first stroke in 1986 1986

CORPORATE BATTLESCORPORATE BATTLES

Goenka then formulated a fresh assault Goenka then formulated a fresh assault issuing statement that Reliance had issuing statement that Reliance had smuggled extra machines in the country smuggled extra machines in the country which lead to his excess built capacitywhich lead to his excess built capacity

Result – notice from customs, duty and Result – notice from customs, duty and penalty claim of 1.19 billion on Reliancepenalty claim of 1.19 billion on Reliance

But Dhirubhai retained public confidence But Dhirubhai retained public confidence and slowly turned tables against Goenkaand slowly turned tables against Goenka

Result – nationwide raid against Express Result – nationwide raid against Express group and number of cases filed against itgroup and number of cases filed against it

Dhirubhai was victorious Dhirubhai was victorious

POLITICAL BATTLESPOLITICAL BATTLESDhirubhai’s good relations with the then PM Indira Dhirubhai’s good relations with the then PM Indira Gandhi, gained him several licenses and Gandhi, gained him several licenses and permissionspermissionsBut after her assassination in 1984, in Rajiv But after her assassination in 1984, in Rajiv Gandhi's rule, a series of problems surfacedGandhi's rule, a series of problems surfacedV. P Singh, finance minister of his cabinet, decided V. P Singh, finance minister of his cabinet, decided to shift PTA imports from the open general category to shift PTA imports from the open general category to the limited permissible list.to the limited permissible list.Since this could be of problem to Reliance, Since this could be of problem to Reliance, Dhirubhai sniffed the problem and moved very fast.Dhirubhai sniffed the problem and moved very fast.He between may 27He between may 27thth & 29 & 29thth like Standard like Standard Chartered, societe Generale and the State Bank of Chartered, societe Generale and the State Bank of India to issue letters of credit for almost a years India to issue letters of credit for almost a years supply of PTA – app. 60,000 tonnes and the banks supply of PTA – app. 60,000 tonnes and the banks issued LC worth Rs. 1.1 billionissued LC worth Rs. 1.1 billion

the last LC was opened just a few hours the last LC was opened just a few hours before the govt. announced the changed before the govt. announced the changed policypolicy

Finance minister, not very happy with this; Finance minister, not very happy with this; result – 50% import duty on PTA.result – 50% import duty on PTA.

In 1986 Reliance also thought of converting In 1986 Reliance also thought of converting non-convertible debentures into convertible non-convertible debentures into convertible ones, but F.m. was against thisones, but F.m. was against this

But once he was transferred to the defence But once he was transferred to the defence ministry the conversion was permitted and ministry the conversion was permitted and pending licenses were also clearedpending licenses were also cleared

POLITICAL BATTLESPOLITICAL BATTLES

October 1986 turned out to be quite October 1986 turned out to be quite favorable for Reliancefavorable for Reliance

The debenture conversion was highly The debenture conversion was highly beneficialbeneficial

A secret meeting between Dhirubhai A secret meeting between Dhirubhai and Rajiv Gandhi seemed to trigger of and Rajiv Gandhi seemed to trigger of decisions in favor of Reliancedecisions in favor of Reliance

Some more pending licenses were Some more pending licenses were cleared, customs levy of Rs.3 per Kg cleared, customs levy of Rs.3 per Kg of PTA was abolished, Patalganga of PTA was abolished, Patalganga complex granted refinery status.complex granted refinery status.

POLITICAL BATTLESPOLITICAL BATTLES

Reliance without DhirubhaiReliance without Dhirubhai

In 2002, Reliance Group turnover of Rs. In 2002, Reliance Group turnover of Rs. 620 billion, assets worth Rs. 564.85 620 billion, assets worth Rs. 564.85 billion and a work force of 85000 people billion and a work force of 85000 people accounted for 5% of the Central govt.’s accounted for 5% of the Central govt.’s total revenue total revenue

It contributed 3% of India’s GDP, 5% of It contributed 3% of India’s GDP, 5% of the total exports, 9% of the GOI’s indirect the total exports, 9% of the GOI’s indirect taxes an nearly 10% of the profits of the taxes an nearly 10% of the profits of the entire corporate sectorentire corporate sector

One out of every 4 investors was a One out of every 4 investors was a shareholder of Relianceshareholder of Reliance


Reliance acquired IPCL, Indian Reliance acquired IPCL, Indian Petrochemical giant which gave it a Petrochemical giant which gave it a sound footing in the global petrochemical sound footing in the global petrochemical marketmarket

In 2004 it took over more than 35% of the In 2004 it took over more than 35% of the global market which made it the 11global market which made it the 11thth largest polymer producer in the worldlargest polymer producer in the world

With amalgamation of RPL with RIL, it With amalgamation of RPL with RIL, it became the only company in the world to became the only company in the world to have fully integrated world scale have fully integrated world scale operations in oil an gas exploration and operations in oil an gas exploration and production, refining and marketing, production, refining and marketing, petrochemicals, power and textilespetrochemicals, power and textiles

Presently reliance enjoys global ranking in all other Presently reliance enjoys global ranking in all other business and its shares lead the domestic marketbusiness and its shares lead the domestic market

According to the global Fortune 500 rankings, According to the global Fortune 500 rankings, Reliance ranks among top 200 companies in terms Reliance ranks among top 200 companies in terms of net profit, amongst top 300 in terms of net of net profit, amongst top 300 in terms of net worth, amongst top 425 in terms of total assets worth, amongst top 425 in terms of total assets and amongst top 500 in terms of salesand amongst top 500 in terms of sales

Reliance Mobile provides cellular telephony in 13 Reliance Mobile provides cellular telephony in 13 states and thousands of villages across the countrystates and thousands of villages across the country

Reliance Power intends to attain the objective to Reliance Power intends to attain the objective to achieve 10,000 MW in the next decadeachieve 10,000 MW in the next decade

The group has also entered into insurance sector The group has also entered into insurance sector with Reliance General Insurance and Reliance life with Reliance General Insurance and Reliance life insuranceinsurance


CRITICISMSCRITICISMS

Some sceptics believe that Reliance would Some sceptics believe that Reliance would no longer be the same after Dhirubhaino longer be the same after Dhirubhai

Because its extraordinary growth was Because its extraordinary growth was based on vision, energy and lobbying based on vision, energy and lobbying power of Dhirubhai as well as the power of Dhirubhai as well as the willingness of the govt. to promote its willingness of the govt. to promote its expansionexpansion

Whereas the competition now is with major Whereas the competition now is with major multinational players whose ability to multinational players whose ability to influence govt. in various ways is well influence govt. in various ways is well knownknown


Management Mantras Management Mantras

GROWTH has no GROWTH has no limit – keep limit – keep revising your revising your visionvision

If you make a plan stick to it If you make a plan stick to it

& keep updating it& keep updating it

GROWTH = LIFEGROWTH = LIFE

LEAP, LOOK, LEAP, LOOK, LEAPLEAP

Think BIG, project with Think BIG, project with clear vision and move clear vision and move ahead with great speed to ahead with great speed to achieve your goalachieve your goal

NURTURE & NURTURE & MOTIVATE THE MOTIVATE THE YOUTHYOUTH

Each one has an infinite Each one has an infinite source of energy – support source of energy – support them to explorethem to explore

BUILD BUILD COMPETENCIESCOMPETENCIES

It is more productive to It is more productive to create competencies create competencies around people & process to around people & process to create valuecreate value

Management MantrasManagement Mantras

BREAK OUT OF BREAK OUT OF YOUR ORBITYOUR ORBIT

Break your hierarchy orbit and rise Break your hierarchy orbit and rise one level higherone level higher

BET ON PEOPLE – BET ON PEOPLE – “TRUST” IS A 5 “TRUST” IS A 5 LETTER WORD FOR LETTER WORD FOR SUCCESSSUCCESS

Trust is the foundation of growth. Trust is the foundation of growth. Trust is never partial.Trust is never partial.

REJECT REJECT INCREMENTAL INCREMENTAL THINKINGTHINKING

Ideas are no ones monopoly. Ideas are no ones monopoly. Encourage all to think out of the Encourage all to think out of the boxbox

BE HUMBLEBE HUMBLE Success is a matter of teamwork Success is a matter of teamwork of employees, shareholders. of employees, shareholders. Never let them down in turn they Never let them down in turn they will not let you downwill not let you down

Management MantrasManagement Mantras

SHUN SHUN PRETENCEPRETENCE

Do as much to acquire Do as much to acquire knowledge and knowledge and delegate the best to the delegate the best to the restrest

DETAIL, DETAIL, DETAIL, DETAIL, DETAILDETAIL

Pay attention to detailPay attention to detail

ACHEIVEMACHEIVEMENT IS ENT IS HISTORY HISTORY LOOK LOOK AHEADAHEAD

Any achievement is an Any achievement is an instant history, it instant history, it becomes past as soon becomes past as soon as it is achievedas it is achieved

DEATH OF AN ICONDEATH OF AN ICON

ON JLY 6ON JLY 6THTH 20 02, The Founder of Reliance 20 02, The Founder of Reliance Mr. Dhirajlal Ambani died after a 13 day Mr. Dhirajlal Ambani died after a 13 day battle for survival. This day is still battle for survival. This day is still remembered as remembered as “Black Day”“Black Day” in Indian in Indian corporate historycorporate historyIt is said that all good things come to an It is said that all good things come to an end, but not in the case of this end, but not in the case of this revolutionist – this fact is proven from revolutionist – this fact is proven from one of his famous quotesone of his famous quotes““Dhirubhai will go one day. But Reliance's Dhirubhai will go one day. But Reliance's employees and shareholders will keep it employees and shareholders will keep it afloat. Reliance is now a concept in which afloat. Reliance is now a concept in which the Ambanis have become irrelevant.”the Ambanis have become irrelevant.”

His funeral saw thousands of people His funeral saw thousands of people attending. Mukesh and Anilattending. Mukesh and Anil

Ambani can be seen carrying their fathers Ambani can be seen carrying their fathers body as per traditionbody as per tradition

The Family TreeThe Family Tree

ANALYSISANALYSIS

THOROUGH DETERMINATION: THOROUGH DETERMINATION: It is seen in It is seen in the stage when he decides to go to Aden, the stage when he decides to go to Aden, having done only his matriculation and even having done only his matriculation and even though he came from humble backgrounds.though he came from humble backgrounds.

STRONG POSITIVE VISIONSTRONG POSITIVE VISION: When he decides : When he decides to come back to India in spite of being to come back to India in spite of being offered a high post that too in a foreign offered a high post that too in a foreign country, and also takes up the huge country, and also takes up the huge challenge to start his own business challenge to start his own business

EXPLORING OPPUTUNITIES: EXPLORING OPPUTUNITIES: when he makes when he makes the best use of govt. schemes to boost his the best use of govt. schemes to boost his salessales

ANALYSISANALYSIS

IMPORTANCE TO CUSTOMERS: IMPORTANCE TO CUSTOMERS: marketing marketing of Vimalof Vimal

CONVERTING PROBLEMS INTO CONVERTING PROBLEMS INTO OPPURTUNITIES: OPPURTUNITIES: when he decides to when he decides to leave traditional wholesaling and open leave traditional wholesaling and open showroomsshowrooms

OUT OF THE BOX THINKING: OUT OF THE BOX THINKING: when he when he decides to offer franchises to his decides to offer franchises to his shareholders, thus ultimately handing shareholders, thus ultimately handing the showrooms in the hands of the the showrooms in the hands of the owners and keeping the shareholders owners and keeping the shareholders intact and increasing the goodwill.intact and increasing the goodwill.

Reliance group of companiesReliance group of companies

RELIANCE INDUSTRIES LTDRELIANCE INDUSTRIES LTDRELIANCE CAPITAL LTD.RELIANCE CAPITAL LTD.RELIANCE PETROLEUM LTD.RELIANCE PETROLEUM LTD.RELIANCE INDUSTRIAL INFRASTRUCTURE RELIANCE INDUSTRIAL INFRASTRUCTURE LTD.LTD.RELIANCE POWERRELIANCE POWERRELIANCE RELECOM LTD.RELIANCE RELECOM LTD.RELIANCE INFOCOMRELIANCE INFOCOMRELIANCE GENERAL INSURANCE CO. LTD.RELIANCE GENERAL INSURANCE CO. LTD.RELIANCE LIFE SCIENCES PRIVATE LTD.RELIANCE LIFE SCIENCES PRIVATE LTD.

MUKESH AND ANILMUKESH AND ANIL

Right from the time he suffered his first stroke he Right from the time he suffered his first stroke he groomed his sons to take care of day-today groomed his sons to take care of day-today operations of Relianceoperations of RelianceHe imbibed in them the quality to think “BIG”He imbibed in them the quality to think “BIG”Despite their education the major training came from Despite their education the major training came from DhirubhaiDhirubhaiAfter his demise Mukesh was appointed Managing After his demise Mukesh was appointed Managing director of the company and Anil became the Vice director of the company and Anil became the Vice ChairmanChairmanIt remains to be seen whether Reliance will maintain It remains to be seen whether Reliance will maintain its lead and growth over multinationals in years to its lead and growth over multinationals in years to comecome

CURRENT SITUATIONCURRENT SITUATION

The Ambani brothers split; and own and The Ambani brothers split; and own and manage their separate business entities manage their separate business entities

as of today: -as of today: -

THE DIVISION THE DIVISION

1.1. Reliance Energy (Rs.4593 Reliance Energy (Rs.4593 crs.)crs.)Power generation.Power generation.Power distribution.Power distribution.

2.2. Reliance Infocomm Reliance Infocomm (Rs.5307 crs.)(Rs.5307 crs.)Mobile services.Mobile services.Basic telephony.Basic telephony.

3.3. Reliance Capital (Rs.298 Reliance Capital (Rs.298 crs.)crs.)Non-Banking financial Non-Banking financial company.company.

1.1. Reliance Industries Reliance Industries (Rs.73,184 crs)(Rs.73,184 crs)

Oil refineries.Oil refineries.

Petrochemicals.Petrochemicals.

Oil retailing.Oil retailing.

Oil Exploitation.Oil Exploitation.

2.2. IPCL (Rs.9386 crs.)IPCL (Rs.9386 crs.)

Petrochemicals.Petrochemicals.

““If it is not the biggest its not worthwhile” If it is not the biggest its not worthwhile” was the motto of the Reliance patriarch was the motto of the Reliance patriarch late Dhirubhai Ambani – late Dhirubhai Ambani –

His sons Anil and Mukesh seemed to His sons Anil and Mukesh seemed to stick to it to the maximum level even in stick to it to the maximum level even in their ownership battle of 99000 crore their ownership battle of 99000 crore empireempire

It is believed that even the spirit of It is believed that even the spirit of Dhirubhai would not have envisaged a Dhirubhai would not have envisaged a corporate battle like this onecorporate battle like this one

Their father Dhirubhai, who died in 2002, left no Their father Dhirubhai, who died in 2002, left no clear will for heirs of the familyclear will for heirs of the family

The split was fashioned like a soap opera with The split was fashioned like a soap opera with new twists and turns unraveling everyday in this new twists and turns unraveling everyday in this sibling rivalrysibling rivalry

In fact it bettered the reel soap operas in its In fact it bettered the reel soap operas in its drama and actiondrama and action

A lot of colorful reasons were attributed to the A lot of colorful reasons were attributed to the discord, ranging from Anil’s foray into politics to discord, ranging from Anil’s foray into politics to gossipy ones like the wives not getting alonggossipy ones like the wives not getting along

But industry observers say that at the heart of the But industry observers say that at the heart of the dispute were the divergent views of the brothers dispute were the divergent views of the brothers on certain key initiativeson certain key initiatives

Both in business and family the Ambani Both in business and family the Ambani brothers moved so far away that it took their brothers moved so far away that it took their mother Kokilaben Ambani and few well mother Kokilaben Ambani and few well wishers to bring them together for an wishers to bring them together for an agreementagreement

If Dhirubhai who founded Reliance Empire If Dhirubhai who founded Reliance Empire and took it on the path of prosperity, would and took it on the path of prosperity, would have been proud of the biggest private have been proud of the biggest private sector entity –sector entity –

it would have posed as much it would have posed as much difficulty for his wife to rip off the seams and difficulty for his wife to rip off the seams and divide the joint fabric of the business groupdivide the joint fabric of the business group

International and domestic media alike International and domestic media alike played up the events in the Ambani played up the events in the Ambani gharanagharana much to the delight of the public and agony much to the delight of the public and agony of the investors. of the investors.

This whole war episode extended to a period This whole war episode extended to a period of seven months and finally on June 18 2005 of seven months and finally on June 18 2005 they legally split as per the settlement made they legally split as per the settlement made by Kokilabenby Kokilaben

In the longest and fiercest battle of corporate In the longest and fiercest battle of corporate India, the feud between the brothers kept 3 India, the feud between the brothers kept 3 million shareholders waiting for the million shareholders waiting for the settlementsettlement

In the end the episode can be concluded In the end the episode can be concluded saying thatsaying that - - what is more important than what is more important than who got what here is that the three million who got what here is that the three million investors have not been affected investors have not been affected

If there is one part of Dhirubhai’s legacy If there is one part of Dhirubhai’s legacy that the sons are taking forward - that the sons are taking forward - it is to it is to keep Reliance in the news and not always keep Reliance in the news and not always for the right reasons for the right reasons

RELIANCE IS NO STRANGER TO RELIANCE IS NO STRANGER TO CONTROVERSYCONTROVERSY

The only difference this time was that the The only difference this time was that the storm was within the family and closely knitstorm was within the family and closely knit

Reliance was in news since 1968 when Reliance was in news since 1968 when Dhirubhai started his textile trade to the Dhirubhai started his textile trade to the recent telecom scam, Reliance was quite recent telecom scam, Reliance was quite often in news for the wrong reasonsoften in news for the wrong reasons

In late 1980’s – the famous Ambani vs. In late 1980’s – the famous Ambani vs. Nusli Wadia warNusli Wadia war

1991 – RIL faced serious charges of share 1991 – RIL faced serious charges of share switching & was hauled up by SEBIswitching & was hauled up by SEBI

IT IS SAID THAT DHIRUBHAI THRIVED ON IT IS SAID THAT DHIRUBHAI THRIVED ON CONTROVERSY`CONTROVERSY`

1996 – the BSE suspended trading in Reliance 1996 – the BSE suspended trading in Reliance because of negligence in duplicate shares and because of negligence in duplicate shares and share-switchingshare-switching

End of 1990s – RIL faced an inquiry by SEBI End of 1990s – RIL faced an inquiry by SEBI into allegations of price manipulation & insider into allegations of price manipulation & insider trading with regard to the sale of its stake in trading with regard to the sale of its stake in Larson & Toubro to Grasim Industries Larson & Toubro to Grasim Industries

1998 – two of Reliance's senior executives 1998 – two of Reliance's senior executives have been accused of violating the Official have been accused of violating the Official Secrets Act Secrets Act

THE TRUE STORY THE TRUE STORY OF OF

THE RELIANCE SPLITTHE RELIANCE SPLIT

HOW IT STARTEDHOW IT STARTED

The fight between the two siblings started The fight between the two siblings started becoming public as early as July 2004, at a becoming public as early as July 2004, at a board meetingboard meetingVarious e-mails and documents circulated Various e-mails and documents circulated within Reliance, conveniently made their way within Reliance, conveniently made their way to the media to the media They showed that the board had introduced a They showed that the board had introduced a supplementary agenda, which sought to supplementary agenda, which sought to redefine the role of managing directors redefine the role of managing directors Subsequently, the resolution was passed by Subsequently, the resolution was passed by the board which gave Mukesh the power to the board which gave Mukesh the power to reduce Anil's role in the company reduce Anil's role in the company

A furious Anil shot off several communiqués to A furious Anil shot off several communiqués to Mukesh and board members questioning them Mukesh and board members questioning them

- on why the resolution had not - on why the resolution had not been pre-circulated, a procedure that had to been pre-circulated, a procedure that had to be followed before a resolution was passed be followed before a resolution was passed On Nov. 18 2004 Mukesh Ambani admitted On Nov. 18 2004 Mukesh Ambani admitted differences with the younger brother Anil differences with the younger brother Anil Ambani to a television channel Ambani to a television channel Initially Anil Ambani remained silent for a few Initially Anil Ambani remained silent for a few days but later admitted differences with his days but later admitted differences with his brotherbrotherFrom then on, there seemed to be no stopping From then on, there seemed to be no stopping the brothers and their confidantes the brothers and their confidantes

The row between the siblings had its origins in The row between the siblings had its origins in the redefinition of roles of CMD, Vice the redefinition of roles of CMD, Vice Chairman and MD in the Reliance Industries Chairman and MD in the Reliance Industries board, which raised heckles in the Anil campboard, which raised heckles in the Anil campAnil claimed that he was kept in dark about Anil claimed that he was kept in dark about most of the decisions of the boardmost of the decisions of the boardAnil raised doubts over the equity pattern of Anil raised doubts over the equity pattern of Reliance Infocomm and abstained from voting Reliance Infocomm and abstained from voting a buyback resolution tabled in the Reliance a buyback resolution tabled in the Reliance Industries board meet Industries board meet Anil was so angry that he told the media that it Anil was so angry that he told the media that it "is me against the Reliance XI" "is me against the Reliance XI" SEBI kept a close look at RIL scrip as a wholeSEBI kept a close look at RIL scrip as a whole

Claiming that “the board has chosen to ignore all my Claiming that “the board has chosen to ignore all my communication” Anil leveled a series of charges against communication” Anil leveled a series of charges against India’s largest private sectorIndia’s largest private sector

In January 2005, Anil Ambani resigned from the board In January 2005, Anil Ambani resigned from the board of the group company IPCLof the group company IPCL

However, the IPCL board kept his resignation in However, the IPCL board kept his resignation in abeyanceabeyance

Things remained low till March end when news trickled Things remained low till March end when news trickled of a possible settlement between the brothersof a possible settlement between the brothers

Meanwhile, Reliance Infocomm got embroiled in a Meanwhile, Reliance Infocomm got embroiled in a controversy with BSNL over illegal routing of controversy with BSNL over illegal routing of international callsinternational calls

The dispute ended with the former having to cough up a The dispute ended with the former having to cough up a huge compensation to BSNLhuge compensation to BSNL

In April, Anil Ambani refused to ratify the In April, Anil Ambani refused to ratify the annual report of Reliance Industriesannual report of Reliance Industries

Things cooled down in the month of May, as Things cooled down in the month of May, as the Finance Minister P Chidambaram hinted at the Finance Minister P Chidambaram hinted at an early settlement between the brothers an early settlement between the brothers

And finally the brothers smoked the peace And finally the brothers smoked the peace pipe on the midnight of June 18 and June 19 pipe on the midnight of June 18 and June 19 as per the settlement letter formulated by their as per the settlement letter formulated by their mother Kokilaben Ambanimother Kokilaben Ambani

Aided by trusted family friend K V Kamath and Aided by trusted family friend K V Kamath and valuer Nimesh Kampani, Kokilaben's formula valuer Nimesh Kampani, Kokilaben's formula for truce envisaged carving out a separate for truce envisaged carving out a separate holding company holding company

KOKILABEN’S SETTLEMENT LETTERKOKILABEN’S SETTLEMENT LETTERKokilaben Ambani, mother of Anil and Mukesh Kokilaben Ambani, mother of Anil and Mukesh Ambani and widow of Reliance founder Ambani and widow of Reliance founder Dhirubhai Ambani, in a statement said that she Dhirubhai Ambani, in a statement said that she was amicably resolved the issues between her was amicably resolved the issues between her sons, which was presented to the mediasons, which was presented to the media

In a signed statement on her personal In a signed statement on her personal letterhead, Kokilaben wrote that she was letterhead, Kokilaben wrote that she was confident that her 2 sons will uphold the values confident that her 2 sons will uphold the values of their father and work towards the goodwill of of their father and work towards the goodwill of the 3million shareholders of the companythe 3million shareholders of the company

Details of the division of companies of Anil and Details of the division of companies of Anil and Mukesh Ambani were also givenMukesh Ambani were also given

AMBANI WAR – A LOST AMBANI WAR – A LOST OPPURTUNITYOPPURTUNITY

During the battle the investors were worried, they During the battle the investors were worried, they wanted their investments to be unaffected by the wanted their investments to be unaffected by the fight or any asset splitfight or any asset split

The way in which they behaved is understandable The way in which they behaved is understandable but what defied logic was the way in which the but what defied logic was the way in which the Manmohan Singh govt. behavedManmohan Singh govt. behaved

Serious charges of misgovernance were leveled Serious charges of misgovernance were leveled against the companyagainst the company

The government was supplied with enough The government was supplied with enough documents to justify a proper probe into the manner documents to justify a proper probe into the manner in which the investors' interests were compromisedin which the investors' interests were compromised

Forgotten were the key issues the dispute Forgotten were the key issues the dispute threw upthrew up

Nor did the commentator consider it his Nor did the commentator consider it his responsibility to examine the serious charges responsibility to examine the serious charges were and whether the ordinary investors in the were and whether the ordinary investors in the group were taken for a ride group were taken for a ride

The ministry of company affairs moved very The ministry of company affairs moved very slowly on the issue slowly on the issue

The Securities and Exchange Board of India The Securities and Exchange Board of India also displayed no desire to take proper action also displayed no desire to take proper action on the many instances of misgovernance in on the many instances of misgovernance in RelianceReliance

And when the brothers have smoked the And when the brothers have smoked the peace pipe, the few investigations that were peace pipe, the few investigations that were launched seem to have been dropped launched seem to have been dropped No one got to hear any progress in themNo one got to hear any progress in themWhy didn’t Company Affairs Minister Prem Why didn’t Company Affairs Minister Prem Chand Gupta not come out with a clear Chand Gupta not come out with a clear answer on the progress of the investigations? answer on the progress of the investigations? This is not surprising during the war every one This is not surprising during the war every one wished the brothers patched up to keep alive wished the brothers patched up to keep alive the legacy of their great fatherthe legacy of their great fatherEven Finance Minister P Chidambaram said Even Finance Minister P Chidambaram said he was sad to see them fighting and hoped he was sad to see them fighting and hoped that they would sort out their problems through that they would sort out their problems through consultationsconsultations

There is no problem in ministers wishing the There is no problem in ministers wishing the two brothers well But what about their two brothers well But what about their responsibilities?responsibilities?Shouldn't they have taken note of the several Shouldn't they have taken note of the several instances of violation of the governance instances of violation of the governance norms, cited by the younger Ambani? norms, cited by the younger Ambani? And why didn’t these unresolved governance And why didn’t these unresolved governance issues in the country's largest corporate entity issues in the country's largest corporate entity not become a subject of heated debate in not become a subject of heated debate in Parliament? Parliament? Aren't our members of Parliament interested Aren't our members of Parliament interested in the observance of governance norms in in the observance of governance norms in Indian companies?Indian companies?

It may not be fair to point fingers only at It may not be fair to point fingers only at ministers and parliamentarians, even a few ministers and parliamentarians, even a few commentators did the samecommentators did the same

One commentator even complimented the One commentator even complimented the Manmohan Singh govt. for staying out of the Manmohan Singh govt. for staying out of the issue, and called it its neutralityissue, and called it its neutrality

Should such neutrality be complimented Should such neutrality be complimented which is nothing but inaction?which is nothing but inaction?

On the contrary, such neutrality should be On the contrary, such neutrality should be criticised for not having taken the necessary criticised for not having taken the necessary action against those found guilty of violating action against those found guilty of violating governance normsgovernance norms

The point that seems to have been missed is The point that seems to have been missed is that the Ambani dispute had given the media that the Ambani dispute had given the media and the investing community the first real and the investing community the first real opportunity to examine and analyse the way opportunity to examine and analyse the way India's largest corporate entity was operating India's largest corporate entity was operating over the years.over the years.This was a rare opportunity. And several This was a rare opportunity. And several sections of the media grabbed it Every investor sections of the media grabbed it Every investor had benefited from this. had benefited from this. There is now greater transparency in the way There is now greater transparency in the way Reliance is held and is run.Reliance is held and is run.

It is a pity that the government did not act It is a pity that the government did not act on the complaints If it had, we could have on the complaints If it had, we could have

expected even more transparency and expected even more transparency and better governancebetter governance

ALL’S WELL THAT ENDS WELLALL’S WELL THAT ENDS WELLWhen you see restructuring or separations in When you see restructuring or separations in a family (firm), value has almost always been a family (firm), value has almost always been destroyed. This is the first case where value destroyed. This is the first case where value has been enhanced. In that way it has been a has been enhanced. In that way it has been a win-win endingwin-win ending

This is evident from the fact that years after This is evident from the fact that years after legendary industrialist Dhirubhai Ambani died legendary industrialist Dhirubhai Ambani died after a stroke, the companies founded by him after a stroke, the companies founded by him continue to be investors' favorites, even continue to be investors' favorites, even though the group was split between his two though the group was split between his two sons Mukesh and Anil sons Mukesh and Anil

MUKESH AMBANIMUKESH AMBANI


BIRTH AND EDUCATIONBIRTH AND EDUCATION

Mukesh Ambani was born on 19Mukesh Ambani was born on 19thth April April 1957 in Aden, Yemen1957 in Aden, Yemen

Began the MBA program at Stanford Began the MBA program at Stanford Business School but dropped out of Business School but dropped out of his first year in order to assist his his first year in order to assist his father’s ongoing efforts to built the father’s ongoing efforts to built the Patalganga petrochemical plantPatalganga petrochemical plant

EDUCATIONEDUCATION

A brilliant student, Mukesh holds a A brilliant student, Mukesh holds a Bachelor of Chemical Engineering from Bachelor of Chemical Engineering from the University of Mumbai Department the University of Mumbai Department of Chemical Technology (UDCT)of Chemical Technology (UDCT)

He began the MBA program at Stanford He began the MBA program at Stanford Business School, but dropped out of his Business School, but dropped out of his first year in order to assist his father’s first year in order to assist his father’s ongoing efforts to built the Patalganga ongoing efforts to built the Patalganga petrochemical plant.petrochemical plant.


CAREERCAREERJoined Reliance in 1981 and initiated Joined Reliance in 1981 and initiated Reliance's backward integration from Reliance's backward integration from textiles into polyester fibers and textiles into polyester fibers and further into petrochemicalsfurther into petrochemicals

He directed and led the creation of the He directed and led the creation of the world's largest grassroots petroleum world's largest grassroots petroleum refinery at Jamnagar, India, with a refinery at Jamnagar, India, with a present capacity of 6,60,000 barrels present capacity of 6,60,000 barrels per day at 10,000 croresper day at 10,000 crores


CAREERCAREERSet up the largest and most complex Set up the largest and most complex information and communications information and communications technology initiative in the world in the technology initiative in the world in the form of Reliance Infocomm Limitedform of Reliance Infocomm LimitedHe is also steering Reliance's initiatives in He is also steering Reliance's initiatives in a world scale, offshore, deep water oil and a world scale, offshore, deep water oil and gas exploration and production program gas exploration and production program And also a pan-India petroleum retail And also a pan-India petroleum retail network involving 5,800 outlets and a network involving 5,800 outlets and a research-led life sciences initiative research-led life sciences initiative covering medical, plant and industrial covering medical, plant and industrial biotechnologybiotechnology


ACHIEVEMENTSACHIEVEMENTS Conferred 'ET Business Leader of the Year' Award by Conferred 'ET Business Leader of the Year' Award by The Economic Times (India) in the year 2006The Economic Times (India) in the year 2006

Had the distinction and honour of being the co-chair Had the distinction and honour of being the co-chair at the World Economic Forum Annual Meeting 2006 in at the World Economic Forum Annual Meeting 2006 in Davos, Switzerland Davos, Switzerland

Ranked 42nd among the 'World's Most Respected Ranked 42nd among the 'World's Most Respected Business Leaders' and second among the four Indian Business Leaders' and second among the four Indian CEOs featured in a survey conducted by CEOs featured in a survey conducted by Pricewaterhouse Coopers and published in Financial Pricewaterhouse Coopers and published in Financial Times, London, November 2004Times, London, November 2004

Conferred the World Communication Award for the Conferred the World Communication Award for the 'Most Influential Person in Telecommunications in 'Most Influential Person in Telecommunications in 2004' by Total Telecom, October, 20042004' by Total Telecom, October, 2004


ACHIEVEMENTSACHIEVEMENTS Chosen 'Telecom Man of the Year 2004' by Chosen 'Telecom Man of the Year 2004' by Voice and Data magazine, September, 2004 Voice and Data magazine, September, 2004

Ranked 13th in Asia's Power 25 list of 'The Most Ranked 13th in Asia's Power 25 list of 'The Most Powerful People in Business' published by Powerful People in Business' published by Fortune magazine, August, 2004Fortune magazine, August, 2004

Conferred the 'Asia Society Leadership Award' Conferred the 'Asia Society Leadership Award' by the Asia Society, Washington D.C., USA, May, by the Asia Society, Washington D.C., USA, May, 20042004

Ranked No.1 for the second consecutive year, in Ranked No.1 for the second consecutive year, in The Power List 2004 published by India Today, The Power List 2004 published by India Today, March, 2004March, 2004


ROSTER OF THE RICHEST IN THE WORLDROSTER OF THE RICHEST IN THE WORLD

MUKESH’S MANTRA OF WORKMUKESH’S MANTRA OF WORK

Think Big. Challenge conventional wisdom. Think Big. Challenge conventional wisdom. Think long-term. Don’t get distracted by short-Think long-term. Don’t get distracted by short-term objectives.term objectives.Always aim for the best. Not just best in India, Always aim for the best. Not just best in India, but in the whole world.but in the whole world.Demand excellence. Demand excellence. Never compromise.Never compromise.Embrace the information technology Embrace the information technology revolution. Make the fullest use of technology.revolution. Make the fullest use of technology.Create leadership qualities and above all, Create leadership qualities and above all, trust in you people.trust in you people.Work Hard. There is no substitute for Work Hard. There is no substitute for determination and perseverance.determination and perseverance.

ANIL AMBANIANIL AMBANI


BIRTH AND EDUCATIONBIRTH AND EDUCATION

Born on June 4, 1959 in Aden, YemenBorn on June 4, 1959 in Aden, Yemen

Did his Bachelors in Science from University of Did his Bachelors in Science from University of Bombay Bombay

Masters in Business Administration The Masters in Business Administration The Wharton School at the University of Wharton School at the University of Pennsylvania Pennsylvania

CAREERCAREER

Joined Reliance in 1983 as Co-Chief Executive Joined Reliance in 1983 as Co-Chief Executive OfficerOfficer

He pioneered India Inc's forays into overseas He pioneered India Inc's forays into overseas capital markets with international public offerings capital markets with international public offerings of global depository receipts, convertibles and of global depository receipts, convertibles and bondsbonds

Starting from 1991, he led Reliance in its efforts to Starting from 1991, he led Reliance in its efforts to raise, around US$2 billion from overseas financial raise, around US$2 billion from overseas financial markets.markets.

In January 1997, the 100-year Yankee bond issue In January 1997, the 100-year Yankee bond issue was launched under his stewardship was launched under his stewardship


ACHIEVEMENTSACHIEVEMENTS

Elected as an independent member Rajya Sabha MP in Elected as an independent member Rajya Sabha MP in June 2004. But he resigned voluntarily on March 25, June 2004. But he resigned voluntarily on March 25, 20062006

'CEO of the Year 2004' in the Platts Global Energy 'CEO of the Year 2004' in the Platts Global Energy Awards Awards

Chairman of the Board of Governors of Dhirubhai Chairman of the Board of Governors of Dhirubhai Ambani Institute of Information and Communication Ambani Institute of Information and Communication Technology, Gandhi Nagar, GujaratTechnology, Gandhi Nagar, Gujarat



ACHIEVEMENTSACHIEVEMENTS'The Entrepreneur of the Decade Award' by 'The Entrepreneur of the Decade Award' by the Bombay Management Associationthe Bombay Management Association

'Businessman of the Year Award' by 'Businessman of the Year Award' by leading Business Magazine, Business India leading Business Magazine, Business India in 1997 in 1997

'MTV Youth Icon of the Year' in September 'MTV Youth Icon of the Year' in September 2003 2003

ANIL’S MANTRA OF WORKANIL’S MANTRA OF WORK

It is often said, people, who are crazy It is often said, people, who are crazy enough to think that they can change the enough to think that they can change the world, are the only ones that actually do!world, are the only ones that actually do!

Relationship and Trust – these are the Relationship and Trust – these are the foundations of successfoundations of success

Work with determination and with perfection, Work with determination and with perfection, success will follow success will follow

Meeting deadlines is not good enough. Beating Meeting deadlines is not good enough. Beating deadlines is what is required.deadlines is what is required.

Pursue your goals even in the face of difficulties Pursue your goals even in the face of difficulties In every adversity, there is opportunityIn every adversity, there is opportunity

Do not accept defeat Challenge negative Do not accept defeat Challenge negative forces. The past will give in You will certainly forces. The past will give in You will certainly succeed. Never give up.succeed. Never give up.


Do not accept defeat Challenge negative Do not accept defeat Challenge negative forces. The past will give in.forces. The past will give in.

You will certainly succeed. Never give upYou will certainly succeed. Never give up

Hope is your most powerful weapon. Self-Hope is your most powerful weapon. Self-confidence is your greatest assetconfidence is your greatest asset

Ordinary people, when motivated, achieve Ordinary people, when motivated, achieve extraordinary thingsextraordinary things

Recognition is your greatest reward.Recognition is your greatest reward.

Work till your last breath. Work is worship.Work till your last breath. Work is worship.


DHIRUBHAI AMBANI DHIRUBHAI AMBANI INTERNATIONAL SCHOOLINTERNATIONAL SCHOOL

"The actions of a great man provide inspiration to others.Whatever he does becomes a standard for them to follow."

-The Bhagavad-Gita

The The Dhirubhai Ambani Dhirubhai Ambani International SchoolInternational School is an is an elite school in Mumbai built by elite school in Mumbai built by the RIL, named after the late the RIL, named after the late patriarch of the conglomerate, patriarch of the conglomerate, Dhirubhai AmbaniDhirubhai Ambani

Currently under the Currently under the chairpersonship of Nita chairpersonship of Nita Ambani Ambani

The school was built in 2003, The school was built in 2003, and is one of the few in India and is one of the few in India that offer the International that offer the International Baccalaureate Program Baccalaureate Program

Located in the up market, G-Located in the up market, G-Block of Bandra-Kurla Block of Bandra-Kurla complex. complex.

Unlike most school programmes in India that Unlike most school programmes in India that focus on rote learning, schooling is done through focus on rote learning, schooling is done through projects, drawing, story-telling and role-play. The projects, drawing, story-telling and role-play. The school has a current strength of 1,000 with a school has a current strength of 1,000 with a faculty of more than 100 members. faculty of more than 100 members.

DAISDAIS

ANIL & MUKESH AS INDIVIDUAL ANIL & MUKESH AS INDIVIDUAL ENTERPRENUERS ENTERPRENUERS

Brothers or rivals?? It is left to be seen…Brothers or rivals?? It is left to be seen…But the two of them control our lives…. But the two of them control our lives…. Right from the current in your bulbs to the Right from the current in your bulbs to the

tinker in your telephone to what you eat, wear, tinker in your telephone to what you eat, wear, cook and entertain upon… it all touches either cook and entertain upon… it all touches either of the Ambani brothers of the Ambani brothers

The country breathes Ambani day-in and The country breathes Ambani day-in and day-out in all its choresday-out in all its choresIn the process the Ambani wealth goes on In the process the Ambani wealth goes on burgeoning many fold though the two take burgeoning many fold though the two take different stances different stances

Furthermore – Furthermore –

Fertilizers, oil n’ gas explorations apart the Fertilizers, oil n’ gas explorations apart the brothers have spread their tentacles in the brothers have spread their tentacles in the mediamedia and and entertainment industryentertainment industry with and with and alacrity that is astounding, indeed!! alacrity that is astounding, indeed!!

STEPPING INTO THE STEPPING INTO THE ENTERTAINMENT INDUSTRYENTERTAINMENT INDUSTRY

Mukesh – Mukesh –

True to his wont, Mukesh has moved in True to his wont, Mukesh has moved in silently, RIL is on the threshold of launching 3 silently, RIL is on the threshold of launching 3 channels, including one for business and one channels, including one for business and one for general newsfor general news

There is a buzz about him doing much more There is a buzz about him doing much more than a few news channelsthan a few news channels

The show industry is agog with expectation The show industry is agog with expectation and with apprehensionand with apprehension

A SNEAK PEAK A SNEAK PEAK While trilling the trillions and buzzing the billions 24/7 While trilling the trillions and buzzing the billions 24/7 Mukeshbhai still has time to think of himself and his Mukeshbhai still has time to think of himself and his familyfamily

For them he is building For them he is building AntillaAntilla which is a 27 floor which is a 27 floor residenceresidence 4532 sq. km. house4532 sq. km. house Costing 120 croreCosting 120 crore 6 floors for parking their 167 cars6 floors for parking their 167 cars 4 for open air balcony gardens4 for open air balcony gardens 2 for spa2 for spa 3 for maintenance to count a few…. Phew!!3 for maintenance to count a few…. Phew!! 4 floors for the family and a HELIPORT at rooftop4 floors for the family and a HELIPORT at rooftop RDX Explosion safe and can withstand an earthquake RDX Explosion safe and can withstand an earthquake

measuring 8 on the Richter scalemeasuring 8 on the Richter scale

ANIL – ANIL –

While Mukesh is playing his cards totally close While Mukesh is playing his cards totally close to his chest, Anil has no such suspense to to his chest, Anil has no such suspense to create and is all set to unleash both the big create and is all set to unleash both the big and small screensand small screens

There he goes to buy 23 screens on There he goes to buy 23 screens on Rave Rave Entertainment Entertainment and gets hold of Bangalore and gets hold of Bangalore based animation co. based animation co. Anright Infomedia Anright Infomedia

The tinsel town’s biggest icon the Big B The tinsel town’s biggest icon the Big B himself has already gathered in his kitty himself has already gathered in his kitty


Anil has carved out a big niche for himself by Anil has carved out a big niche for himself by acquiring the acquiring the Adlabs Adlabs chainchain

Also has big time plans of barging into feature Also has big time plans of barging into feature film production with deep, deep pockets to film production with deep, deep pockets to rope in the biggest of stars and technicians rope in the biggest of stars and technicians

ADAG has also made financial investment in ADAG has also made financial investment in channels like channels like TV TODAY, NDTV, besides TV TODAY, NDTV, besides hobnobbing with BBChobnobbing with BBC

He pushes the envelope with his social He pushes the envelope with his social networking site, networking site, BigAdda.comBigAdda.com to give to give Orkut’sOrkut’s and the and the Myspace.comMyspace.com a run for their money a run for their money


Then also there is this rolling out of the Then also there is this rolling out of the Big FMBig FM radio channels in 45 cities making it the bigger radio channels in 45 cities making it the bigger than the existing biggest radio channels – Sun, than the existing biggest radio channels – Sun, and Radio Mirchiand Radio MirchiThis year end will see the company bulldozing This year end will see the company bulldozing into DTH services with a target of 2-3 million into DTH services with a target of 2-3 million households under its canopy that too in the households under its canopy that too in the first year itself first year itself Furthermore, the success of Zapak.com – 1 Furthermore, the success of Zapak.com – 1 million registered within a few months of its million registered within a few months of its launch – is the stuff true champions are made launch – is the stuff true champions are made of of


AND HE HAS NEVER STOPPED AND HE HAS NEVER STOPPED RUNNINGRUNNING

And that’s how the show world is And that’s how the show world is Ambaniised!!!!!!Ambaniised!!!!!!

On the face of it is one buy here and one On the face of it is one buy here and one holding there – what people don’t see is holding there – what people don’t see is the picture ahead which the brothers are the picture ahead which the brothers are

aimingaiming

It is the power of x – raying that make the It is the power of x – raying that make the brothers one (or shall we say, two) of a brothers one (or shall we say, two) of a

kind!!!!!kind!!!!!

TO CONCLUDE:TO CONCLUDE:

IS THE LEGECY OF THE RELIANCE IS THE LEGECY OF THE RELIANCE PATRIARCH DHIRUBHAI RIGHTLY PATRIARCH DHIRUBHAI RIGHTLY

CONTINUED??CONTINUED??

Isn’t the answer obvious???Isn’t the answer obvious???

His sons have parted ways but it has been to His sons have parted ways but it has been to good effect in the final analysisgood effect in the final analysis

Even Kokilaben settled the issue keeping in Even Kokilaben settled the issue keeping in mind the proud legacy of her husband – which mind the proud legacy of her husband – which was – is, and always will be – was – is, and always will be –

““Karlo Dunia Mutthi Mein”Karlo Dunia Mutthi Mein”

Thus, the legacy indeed continued with a Thus, the legacy indeed continued with a double impact!!double impact!!

Instead of Instead of ONEONE trillionaire company, there trillionaire company, there are are TWO TWO trillionaire Ambani conglomeratestrillionaire Ambani conglomerates

So there you are – So there you are –

“ “ It is DOUBLE the DUNIA in DOUBLE the It is DOUBLE the DUNIA in DOUBLE the MUTTHI”MUTTHI”

Ambani Case Study

Documents

polyester

fathers ongoing

largest corporate

corporate

manmohan singh

patalganga

stanford business

domestic market