Dhirubhai Ambani Biography Born: December 28, 1932 Died: July 6, 2002 Achievements: Dhiru Bhai Ambani built India's largest private sector company. Created an equity cult in the Indian capital market. Reliance is the first Indian company to feature in forbes 500 list. Dhirubhai Ambani was the most enterprising Indian entrepreneur. His life journey is reminiscent of the rags to riches story. He is remembered as the one who rewrote Indian corporate history and built a truly global corporate group. Dhirubhai Ambani alias Dhirajlal Hirachand Ambani was born on December 28, 1932, at Chorwad, Gujarat, into a Modh family. His father was a school teacher. Dhirubhai Ambani started his entrepreneurial career by selling "bhajias" to pilgrims in Mount Girnar over the weekends.
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Dhirubhai Ambani Biography
Born: December 28, 1932
Died: July 6, 2002
Achievements: Dhiru Bhai Ambani built India's largest private sector
company. Created an equity cult in the Indian capital market. Reliance is the
first Indian company to feature in forbes 500 list.
Dhirubhai Ambani was the most enterprising Indian entrepreneur. His
life journey is reminiscent of the rags to riches story. He is remembered as
the one who rewrote Indian corporate history and built a truly global
corporate group.
Dhirubhai Ambani alias Dhirajlal Hirachand Ambani was born on
December 28, 1932, at Chorwad, Gujarat, into a Modh family. His father
was a school teacher. Dhirubhai Ambani started his entrepreneurial career by
selling "bhajias" to pilgrims in Mount Girnar over the weekends.
After doing his matriculation at the age of 16, Dhirubhai moved to
Aden, Yemen. He worked there as a gas-station attendant, and as a clerk in
an oil company. He returned to India in 1958 with Rs 50,000 and set up a
textiletrading company.
Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built
India's largest private sector company, Reliance India Limited, from a
scratch. Over time his business has diversified into a core specialisation in
petrochemicals with additional interests in telecommunications, information
technology, energy, power, retail, textiles, infrastructure service
infrastructure services, capital markets, and logistics.
Dhirubhai Ambani is credited with shaping India's equity culture, attracting
millions of retail investors in a market till then dominated by financial
institutions. Dhirubhai revolutionised capital markets. From nothing, he
generated billions of rupees in wealth for those who put their trust in his
companies. His efforts helped create an 'equity cult' in the Indian capital
market. With innovative instruments like the convertible debenture, Reliance
quickly became a favorite of the stock market in the 1980s.
In 1992, Reliance became the first Indian company to raise money in global
markets, its high credit-taking in international markets limited only by
India's sovereign rating. Reliance also became the first Indian company to
feature in Forbes 500 list.
Dhirubhai Ambani was named the Indian Entrepreneur of the 20th Century
by the Federation of Indian Chambers of Commerce and Industry (FICCI).
A poll conducted by The Times of India in 2000 voted him "greatest creator
of wealth in the century".
The Reliance Group founded by Dhirubhai is India’s largest business house
with total revenues of Rs. 80,000 crore (US $ 16.8 billion), cash profit of
over Rs. 9,800 crore, net profit of over Rs. 4,700 crore and exports of Rs.
11,900 crore. The group’s activities span exploration of production of oil
and gas, refining and marketing, petrochemicals (polyester, polymers and
intermediates), textiles, financial services and insurance, power, telecom and
infocom initiatives. Reliance emerged as India’s "Most Admired Business
House" for the second successive year in a TNS-Mode survey for 2002.
Reliance Industries Limited (RIL) is India's largest private sector company
on all major financial parameters with gross turnover of Rs. 65,061 crore,
cash profit of Rs. 7,565 crore, net profit of Rs. 4,104 crore, net worth of Rs.
30,327 crore and total assets of Rs. 63,737 crore. RIL features in the Forbes
Global list of the world's 40 best big companies and in FT Global 500 list of
the world's largest companies.
RIL has emerged as the 'Best Managed Company' in a study by Business
Today and A. T. Kearney. RIL was named in the World's Most Respected
Companies list published by Financial Times based on a global survey and
research conducted by Price Waterhouse Copers. RIL also emerged as the
most respected among Indian companies and amongst the 10 most respected
energy and chemical companies in the world.
Credited with a number of financial innovations in the Indian capital
markets, the Reliance Group today has one of the largest family of
shareholders in the world. It is now India's leading textiles-petroleum-
petrochemicals-power-telecom player. And all this began in 1958 when
Dhirubhai Ambani started his first company, Reliance Commercial
Corporation, a commodity trading and export house.
THE DEATH OF AN ICON
The 6th of July 2002 was a black day in the Indian corporate history. The
Founder and Chairman of the Reliance group of Industries (Reliance),
Dhirajlal Hirachand Ambani (Dhirubhai) died after a 13 day battle for
survival. A perfect combination of entrepreneurship and leadership,
Dhirubhai transformed Reliance from a company with a turnover of Rs 640
million in 1976, to one with a turnover of Rs 620 billion in 2002.
Secret of success:
THE PASSING away of Dhirubhai Ambani, Chairman of the Reliance
group on July 6, signals the end of an era in Indian corporate history. For the
company, however, it raises some queries regarding the future of the group.
While there is no shortage of plaudits for the genius and financial acumen of
Dhirubhai Ambani, his two sons — Mukesh Ambani, Vice Chairman and
Managing Director, and Anil Ambani, Managing Director of Reliance —
have inherited the reins of a Rs. 65,000 crore empire.
The reasons why Dhirubhai Ambani is touted as having the equity cult in the
country are not far to seek. The company entered the capital market in 1977
with what was then a huge public issue of 28 lakh shares under the name of
Reliance Textile Industries. Thereafter, it has approached the market on
several occasions and the investing public have always responded heartily.
The stage was set in 1985 itself when the company's annual meeting was
held in the Cooperage grounds of Mumbai (a football stadium) and attended
by no less than 12,000 eager investors.
First to tap GDR market
Reliance was also the first Indian company to successfully tap the Global
Depository Receipt (GDR) market in 1992. It is also the only Indian
company to raise 50 and 100 year bonds in the U.S. debt markets. Thus, it
successfully raised cheaper funds overseas with lower borrowing costs to
repay higher cost Indian borrowings.
The company also successfully dabbled in the stock market; often creating
controversy and there is no shortage of accusations that it `managed' the
political environment and has often been seen to have influenced policy
making.
In the years of the `Licence Raj' — industrial policy declarations made
periodically where public sector enterprises were given preference for
licences, example, availability of raw materials, foreign exchange and quotas
— a phenomenon that peaked in the late 1970s and the early 1980s but died
out in the 1990s, Ambani's skills were at their best. A senior industrialist,
when asked what differentiated Ambani from other businessmen, said,
"Everyone managed to get things done during that period; only Dhirubhai
managed it better.''
Phenomenal growth
An interesting fact is that the Reliance group has seen its most phenomenal
growth in the last decade and a half; the period when Dhirubhai Ambani had
already suffered his first debilitating paralytic stroke. Recall that when he
suffered the stroke in 1986, the company's assets were a mere Rs. 1,000
crores. Then, it had three major projects going on stream — PTA (purified
terephthalic acid), PSF (polyester staple fibre) and LAB (linear alkyl
benzene) — all inputs for polyester — in Patalganga. The Hazira mega
complex was then only an aspiration.
The secret of the success post-1986 is buffeted by the transition of power
from the father to sons Mr. Mukesh Ambani and Mr. Anil Ambani with a
clear cut division of responsibility between the two under the supervision of
Dhirubhai Ambani.
While one face of Reliance is its project implementation skills, the second is
the financial wizardry. The project implementation team is kept away from
all the happenings of the corporate team. The skills of the project team are
borne out by the fact that it was able to implement the mega projects at
Patalganga, Hazira and Jamnagar in record time.
The financial team has, over the years shifted from raising funds from
domestic equity investors to financial institutions and overseas investors.
Today, Reliance enjoys a high credit rating and has no problem convincing
institutional investors. The project implementation and finance teams are
considered worldclass and top of the line.
Today the Reliance group is the country's largest enterprise in the private
sector with revenues in excess of Rs. 60,000 crores, assets of Rs. 55,000
crores and a net profit in excess of Rs. 4,500 crores. Its sphere of activity
span petrochemicals — up and down the value chain — including synthetic
fibres, fibre intermediates, textiles and oil and gas. More recently, Reliance
entered financial services, power, insurance, telecom, biotechnology and
infocom.
Foray into telecom
The recent diversifications are unrelated and that is where Reliance will have
to really pass the acid test. That the group does not lack financial muscle to
power its way into these areas is a given, but each of the new areas is as
unrelated to the other as it is huge. The telecom-infocom foray is a case in
point. The Reliance group has committing to invest more than Rs. 25,000
crores in this sector that is beset with competition.
Reliance has a 26 per cent stake in Reliance Telecom which provides
cellular services to over 3.50 lakh subscribers over 15 States. The group will
also be investing in building a broadband backbone, to connect 115 cities
with 60,000 kilometres of fibre. Reliance Infocom plans to have a national
footprint in telecom with a presence in fixed line, mobile, national and long
distance and international long distance telephony, data, image and value
added services. This, however, goes against the recent international trend of
choosing the more remunerative value-added services over building and
renting telecom infrastructure.
Then there are new areas such as insurance and biotechnology that needed to
be tackled. This is where the mettle of Mr. Mukesh Ambani and Mr. Anil
Ambani will be tested or not.
What do you call a man who hates to lose? A winner? That is too easy, too
glib, and buries the story. All Dhirajlal Hirachand Ambani ever wanted to be
is the biggest there ever is, the best there ever was. He wanted a piece of the
action -- preferably all of it. If others wouldn't let him in, he would create his
own turf and own it all.
And so the history of a corporate buccaneer will come to be written. If he
allows an epitaph, as he must -- the petrochemical complexes and refineries
that bear the name of Reliance will tell it better -- it could echo this line. A
line he almost spat at me once, triggered by a provocation about
competition: "Dekho," he snarled, "I'm not a loser."
So what is he really, this one-time cloth trader whose group now owns
textile manufacturing companies? A ragged marketeer for Shell in Aden
whose sons now oversee India's largest oil refinery in Jamnagar? A man who
ran from pillar to post, begging for a break, and whose representatives --
solely on account of business interest -- now part of an unofficial negotiating
team to Pakistan at the height of the Kargil war? A man who almost single-
handedly exploded the somnolent share bazaars into frenetic activity, using
it as a lever to gain funds and distribute wealth on an epic scale? Dekho, he
will tell you, as his sons will, we're not losers. Failure was never an option.
The effort has been so simple in its brilliance that it's mind-numbing nobody
thought of it before he did, the way he did. In a country where business
routinely took consumers for a ride, Dhirubhai was the first who said: come,
ride with me. We will get wealthy together, do you care what others say? So
a licence, which detractors said was out of turn, with superb project
management, has brought plants to manufacture textiles in Naroda, polyester
in Patalganga, petrochemicals in Hazira and a refinery on Gujarat's coast a
missile-hop away from Pakistan.The simple expedient of ensuring generous,
timely dividends to shareholders -- in 1985 Reliance offered the largest
dividend in the history of corporate India -- made investors feel part of his
success.
It also ensured cheap stock-market funds on tap when corporate India was
weighed down by expensive bank borrowing. Dhirubhai redefined
economies of scale for modern India, integrating industries backward and
forward, bulldozing clearances, always growing, as many said, too fast for
his own good. He planned in such a way he wouldn't have to pay a rupee in
corporate taxes. He raised funds and reduced his debt burden with the
convertible debenture, rarely used until he did. And all the while, he would
smile and tell us: "I'm the bubble that burst."
India Inc, such as it was, had thrived for decades -- it still does -- on a
system of patronage, the cannibalistic politics-business nexus. Monopoly
controls were the lock, licences were the key and corporate India was in the
pocket of policymakers. Dhirubhai barged into that league, playing exactly
by the established, shadowy rules of the game. Only, he wouldn't toe the
line. He wanted the line to toe him. "I had the courage to defy the system,"
he said, "face persecution even."
For Dhirubhai, now 66, the end has always been as important as the means.
That is corporate skulduggery in black and white, and for which he has paid
a heavy price. Competition wanted to beat him down by destroying his
stock, his investors' stock and Reliance's credibility as a fund-raiser.
Dhirubhai ran an operation that bought Reliance shares for weeks, drove
prices sky-high and bankrupted more than one broker. But he could not then
and has not been able to now, dent arch rival Nusli Wadia's polyester
empire.
By brazenly getting projects through in a licence environment, he made
many enemies. One who almost brought him down was V.P. Singh. In the
mid-'80s when Singh the finance minister flew as high as Reliance, Singh
and Wadia won some wars. Dhirubhai has a debilitating stroke to show for
it, a battle scar that effectively announced that while two could play the
game, one has to lose; it also signalled his sons, Mukesh and Anil -- fiercely
protective of their father -- to take over.
Today, Reliance is India's third-largest group after Tata and A.V. Birla. Its
books are scrutinised in as fussy a place as Wall Street. When Mukesh and
Anil talk about "the PM" or "the President" it would be incorrect to presume
they are talking about our heads of state. When they go vacationing in
Switzerland or on safari in Africa, they must sometimes think of where they
come from, a one-room chawl in Mumbai. They must also think of the man
who made so much possible. And while they plot and plan and go about
their business, Reliance gets bigger.
The two faces of Dhirubhai Ambani
He achieved what almost everybody would consider impossible. In a life
spanning 69 years, he built from scratch India’s largest privately controlled
corporate empire. Dhirajlal Hirachand – better known as Dhirubhai –
Ambani would often say that success was his biggest enemy. He was a man
who aroused extreme responses in others. Either you loved him or you hated
him. There was just no way you could have been indifferent to this amazing
entrepreneur who thought big, acted tough, knew how to bend rules or have
rules bent for him. He was a visionary as well as a manipulator, a man who
communicated with the rich and the poor with equal felicity, who was
generous beyond the call of duty with those whom he liked and utterly
ruthless with his rivals – a man of many parts, of irreconcilable contrasts and
paradoxes galore.
Dhirubhai Ambani expired on Saturday July 6, roughly ten minutes before
midnight, at Mumbai’s Breach Candy Hospital where he had been admitted
after he suffered a vascular stroke on the evening of June 24. This was his
second stroke – the first had occurred more than sixteen years earlier, in
February 1986, leaving the right side of his body paralyzed. At his
cremation, the well-heeled rubbed shoulders with the ordinary. No Indian
businessman ever attracted the kind of crowd that Dhirubhai did on his last
journey. After his cremation on the evening of Sunday July 7, his elder son
Mukesh reminded those gathered on the occasion that in 1957, when