Dhirubhai Ambani
| The World's Richest Family | |
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| Born | December 28, 1933 Chorwad, Gujarat, British India |
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| Died | July 6, 2002 (aged 68) Mumbai, Maharashtra, India |
| Occupation | Industrialist | Entrepreneur |
| Net worth | ▲ US$6.10 Billion |
| Spouse(s) | Kokilaben Ambani |
| Children | Mukesh Ambani Anil Ambani Nina Kothari Deepti Salgaonkar |
| Website www.ril.com | |
Dhirajlal Hirachand Ambani (28 December 1933, - 6 July 2002), (also known as Dhirubhai Gujarati: ધીરૂભાઈ અંબાણી) was an Indian rags-to-riches business tycoon who founded Reliance Industries in Mumbai with his cousin. Many people consider Ambani's phenomenal rise to be an example of crony capitalism and the result of proximity to the ruling politicians because it was achieved through preferential treatment given to him in a highly repressive business environment (the License Raj stifled Indian business until the early 1990s and only those favored by the politicians were granted licenses leaving them with no competition). Ambani took his company (Reliance) public in 1977, and by 2007 the combined fortune of the family (sons Anil & Mukesh) was 100 billion dollars, making the Ambanis one of the richest families in the world.
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Early life
Dhirubhai Ambani (Dh ira jlal ira Ambani) was born on 28 December 1933, at Chorwad, Junagadh (now the state of Gujarat, India) to Hirachand Gordhanbhai Ambani and Jamnaben[1] in a Modh Bania family of very moderate means. Although he was born in Gujarat, he is of Sindhi descent, which is a socio-ethnic group that belonged to Sindh, a former area of Northwest India that now belongs to Pakistan after the Partition. [2] He was the second son of a school teacher. Dhirubhai Ambani is said to have started his entrepreneurial career by selling "pakora" to pilgrims in Mount Girnar over the weekends.[3] When he was 16 years old, he moved to Aden, Yemen. He worked with A. Besse & Co. for a salary of Rs.300. Two years later, A. Besse & Co. became the distributors for Shell products, and Dhirubhai was promoted to manage the company’s filling station at the port of Aden.
He was married to Kokilaben and had two sons, Mukesh Ambani and Anil Ambani and two daughters, Nina Kothari and Deepti Salgaocar.
Reliance Commercial Corporation
In 1962, Dhirubhai returned to India and started the Reliance Commercial Corporation with a capital of Rs.15,000.00. The primary business of Reliance Commercial Corporation was to import polyester yarn and export spices.
The business was setup in partnership with Champaklal Damani, his second cousin, who used to be with him in Aden, Yemen. The first office of the Reliance Commercial Corporation was set up at the Narsinatha Street in Masjid Bunder. It was a 350 sq ft. room with a telephone, one table and three chairs. Initially, they had two assistants to help them with their business. In 1965, Champaklal Damani and Dhirubhai Ambani ended their partnership and Dhirubhai started on his own. It is believed that both had different temperaments and a different take on how to conduct business. While Mr. Damani was a cautious trader and did not believe in building yarn inventories, Dhirubhai was a known risk taker and he considered that building inventories, anticipating a price rise, and making profits thnd Estate in Bhuleshwar,
Mumbai[4]. In 1968, he moved to an upmarket apartment at Altamount Road in South Mumbai. Ambani's net worth was estimated at about Rs.10 lakh by late 1960s.
- Reliance Textiles
Sensing a good opportunity in the textile business, Dhirubhai started his first textile mill at Naroda, in Ahmedabad in the year 1966. Textiles were manufactured using polyester fibre yarn.[5] Dhirubhai started the brand "Vimal", which was named after his elder brother Ramaniklal Ambani's son, Vimal Ambani. Extensive marketing of the brand "Vimal" in the interiors of India made it a household name. Franchise retail outlets were started and they used to sell "only Vimal" brand of textiles. In the year 1975, a Technical tea
m from the World Bank visited the Reliance Textiles' Manufacturing unit. This unit has the rare distinction of being certified as "excellent eve by developed country standards" during that period. [6] he was a great person
Initial public offering
Dhirubhai Ambani is credited with starting the equity cult in India. More than 58,000 investors from various parts of India subscribed to Reliance's IPO in 1977. Dhirubhai was able to convince people of rural Gujarat that being shareholders of his company will only bring returns to their investment.
Reliance Industries holds the distinction that it is the only Private Sector Company whose several Annual General Meetings were held in stadiums. In 1986, The Annual General Meeting of Reliance Industries was held in Cross Maidan, Mumbai and was attended by more than 35,000 shareholders and the Reliance family.
Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial returns on their investments.
Ambani's net worth was estimated at about Rs.1 billion by early 1980s.i think dhirubhai ambani has created a history
Dhirubhai's control over stock exchanges
In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures.[7] It was rumored that company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, a bear cartel which was a group of stock brokers from Calcutta started to short sell the shares of Reliance. To counter this, a group of stock brokers till recently referred to as "Friends of Reliance" started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange.
The Bear Cartel was acting on the belief that the Bulls would be short of cash to complete the transactions and would be ready for settlement under the "Badla" trading system prevalent in Bombay Stock Exchange during those days. The bulls kept on buying and a price of Rs. 152 per share was maintained till the day of settlement. On the day of settlement, the Bear Cartel was taken aback when the Bulls demanded a physical delivery of shares. To complete the transaction, the much needed cash was provided to the stock brokers who had bought shares of Reliance, by none other than Dhirubhai Ambani. In the case of non-settlement, the Bulls demanded an "Unbadla" (a penalty sum) of Rs. 35 per share. With this, the demand increased and the shares of Reliance shot above 180 rupees in minutes. The settlement caused an enormous uproar in the market and Dhirubhai Ambani was the unquestioned king of the stock markets. He proved to his detractors just how dangerous it was to play with Reliance.
The situation was getting completely out of control. To find a solution
to this situation, the Bombay Stock Exchange was closed for three business days. Authorities from the Bombay Stock Exchange intervened in the matter and brought down the "Unbadla" rate to Rs. 2 with a stipulation that the Bear Cartel had to deliver the shares within the next few days. The Bear Cartel bought shares of Reliance from the market at higher price levels and it was also learnt that Dhirubhai Ambani himself supplied those shares to the Bear Cartel and earned a healthy profit out of The Bear Cartel's adventure. [8]
After this incident, many questions were raised by his detractors and the press. Not many people were able to understand as to how a yarn trader till a few years ago was able to get in such a huge amount of cash flow during a crisis period. The answer to this was provided by the then finance minister, Pranab Mukherjee in the parliament. He informed the house that a Non-Resident Indian had invested up to Rs. 22 Crore in Reliance during 1982-83. These investments we
re routed through many companies like Crocodile, Lota and Fiasco. These companies were primarily registered in Isle of Man. The interesting factor was that all the promoters or owners of these companies had a common surname Shah. An investigation by the Reserve Bank of India in the incident did not find any unethical or illegal acts or transactions committed by Reliance or its promoters.[9]
Diversification
Over time, Dhirubhai diversified his business with the core specialisation being in petrochemicals and additional interests in telecommunications, inform
ation technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics. The company as a whole was described by the BBC[10] as "a business empire with an estimated annual turnover of $12bn, and an 85,000-strong workforce".
Criticism
Despite his almost Midas Touch, Ambani has been known to have flexible values and an unethical streak running through him. His biographer himself has cited some instances of his unethical behavior when he was just an ordinary employee at a petrol pump in Dubai. He has been accused of having manipulated government polic
ies to suit his own needs, and has been known to be a king-maker in government elections [11]. Although most media sources tend to speak out about business-politics nexus, the Ambani house has always enjoyed more protection and shelter from the media storms that sweep across the country.
Tussle with Nusli Wadia
Nusli Wadia of Bombay Dyeing was, at one point in time, the biggest competitor of Dhirubhai and Reliance Industries. Both Nusli Wadia and Dhirubhai were known for their influence in the political circles and their ability to get the most difficult licenses approved during the times of pre-liberalized economy.
During the Janata Party rule between 1977 - 1979, Nusli Wadia obtained the
permission to build a 60,000 tonnes per annum Di-methyl terephthalate (DMT) plant. Before the letter of intent was converted into a licence, many hurdles came in the way. Finally, in 1981, Nusli Wadia was granted the license for the plant. This incident acted as a catalyst between the two parties and the competition took an ugly turn.
The Indian Express Articles
As days passed by, The Indian Express, a broadsheet daily published by him, carried a series of articles against Reliance Industries and Dhirubhai in which they claimed that Dhirubhai was using unfair trade practices to maximise the profits. Ramnath Goenka did not use his staff at the Indian Express to investigate the case but assigned his close confidante, advisor and chartered accountant S. Gurumurthy for this task. Apart from S. Gurumurthy, another journalist Maneck Dav
ar who was not on the rolls of Indian Express started contributing stories. Jamnadas Moorjani, a businessman opposed to the Ambanis was also a part of this campaign.
Both Ambani and Goenka were equally criticized and admired by sections of the society. People criticized Goenka that he was using a national newspaper for the cause of a personal enmity. Critics believed that there were many other businessman in the country who were using more unfair and unethical practices but Goenka chose to target only Ambani and not the others. Critics also admired Goenka for his ability to run these articles without any help from his regular staff. Dhirubhai Ambani was also getting more recognition and admiration, in the meantime. A section of the public started to appreciate Dhirubhai's business sense and his ability to tame the system according to his wishes.
The end to this tussle came only after Dhirubhai Ambani suffered a stroke. While Dhirubhai Ambani was recovering in San Diego, his sons Mukesh Ambani and Anil Ambani managed the affairs. The Indian Express had turned the guns
against Reliance and was directly blaming the government for not doing enough to penalize Reliance Industries. The battle between Wadia - Goenka and the Ambanis took a new direction and became a national crisis. Gurumurthy and another journalist, Mulgaokar consorted with President Giani Zail Singh and ghost-wrote a hostile letter to the Prime Minister on his behalf. The Indian Express published a draft of the President’s letter as a scoop, not realizing that Zail Singh had made changes to the letter before sending it to Rajiv Gandhi. Ambani had won the battle at this point. Now, while the tussle was directly between the Prime Minister Rajiv Gandhi and Ramnath Goenka, Ambani made a quiet exit. The government then raided the Express guest house in Delhi’s Sunder Nagar and found the original draft with corrections in Mulgaokar’s handwriting. By 1988-89, Rajiv’s government retaliated with a series of prosecutions against the Indian Express. Even then, Goenka retained his iconic stature because, to many people, he seemed to be replaying his heroic defiance during the Emergency regime[citation needed].
Dhirubhai and V.P.Singh
It was widely known that Dhirubhai didn't enjoy a cordial relation with Vishwanath Pratap Singh, who succeeded Rajiv Gandhi as the Prime Minister of India. In May 1985, V. P. Singh suddenly stopped the import of Purified Terephthalic Acid from the Open General License category. As a raw material this was very important to manufacture polyester filament yarn. This made it very difficult for Reliance to carry on operations. Reliance was able to secure, from various financial institutions, letters of credit that would allow it to import almost one full year’s requirement of PTA on the eve of the issuance of the government notification, changing the category under which PTA could be imported. In 1990, the government-owned financial institutions like the Life Insurance Corporation of India and the General Insurance Corporation stonewalled attempts by the Reliance group to acquire managerial control over Larsen & Toubro. Se
nsing defeat, the Ambanis resigned from the board of the company. Dhirubhai, who had become L&T's chairman in April 1989, had to quit his post to make way for D. N. Ghosh, former chairman of the State Bank of India.
Death
Dhirubhai Ambani was admitted to the B
reach Candy Hospital in Mumbai on June 24, 2002 after he suffered a major stroke. This was his second stroke, the first one had occurred in February 1986 and had kept his right hand paralyzed. He was in a state of coma for more than a week. A battery of doctors were unable to save his life. He breathed his last on July 6, 2002, at around 11:50 P.M. (Indian Standard Time).
His funeral procession was not only attended by business people, politicians and celebrities but also by thousands of ordinary people. His elder son, Mukesh Ambani, performed the last rites as per Hindu traditions. He was cremated at the Chandanwadi Crematorium in Mumbai at around 4:30 PM (Indian Standard Time) on July 7, 2002.
He is survived by Kokilaben Ambani, his wife, two sons, Mukesh Ambani and Anil Ambani, and two daughters, Nina Kothari and Deepti Salgaonkar.
Dhirubhai Ambani started his long journey in Bombay from the Mulji-Jetha Textile Market, where he started as a small-trader. As a mark of respect to this great businessman, The Mumbai Textile Merchants' decided to keep the market closed on July 8, 2002. At the time of Dhirubhai's death, Reliance Group had a gross turnover of Rs. 75,000 Crore or USD $ 15 Billion. In 1976-77, the Reliance group had an annual turnover of Rs 70 crore and it is to be remembered that Dhirubhai had started the business with just Rs.15,000(US$350)
Reliance Communications
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| Type | Public (BSE: RCOM) |
| Founded | 2004 |
| Headquarters | Navi Mumbai, India |
| Key people | Anil Ambani, Chairman and Managing Director Satish Seth, Vice-Chairman Reliance-ADA Group S. P. Shukla, CEO - Personal Business & Director - Reliance Telecom |
| Industry | Telecommunications |
| Products | CDMA service, GSM service, Broadband Internet Service |
| Revenue | US$ 4 Billion |
| Employees | 33,000 |
| Website | Reliance Communications |
Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). According to National Stock Exchange data, Anil Ambani controls 66.75 per cent of the company, which accounts for more than 1.36 billion shares of the company.[1]Reliance Infocomm is an Indian telecommunications company. It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising of power (Reliance Energy), financial services (Reliance Capital) and telecom initiatives of the Reliance ADA Group. Reliance Infocomm is currently managed by Anil Dhirubhai Ambani.It uses CDMA2000 1x technology.
RelCom is also into Wireline Business through out India and has the largest OFC backbone architecture [roughly 110,000 KMs] in the country. The company also has license in the GSM telecom services space for most of the Telecom Circles ( zones in layman's words). It currently operates in 8 circles and plans to launch in the others soon.
Reliance Communications has interests in Direct To Home (DTH) TV also, known as "Big TV". It plans to launch its DTH business by July 2008. Once done, RelCom will have presence across all B2C communications channel in one of the fastest growing markets in the world.
Reliance Power
| Reliance Power Limited | |
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| Type | Public company |
| Founded | 2007 |
| Headquarters | Mumbai, India |
| Key people | Anil Ambani, Founder and Chairman |
| Industry | Electricity generation |
| Website | http://www.reliancepower.co.in |
Reliance Power Limited, a part of the Reliance Anil Dhirubhai Ambani Group, was established to develop, construct and operate power projects in the domestic and international markets. Reliance Energy Limited, an Indian private sector power utility company along with the Anil Dhirubhai Ambani Group promotes Reliance Power.
Along with its subsidiaries, it is presently developing 13 medium and large-sized power projects with a combined planned installed capacity of 28,200 MW.
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About the company
The company was incorporated in January 1995 as Bawana Power Private Limited and changed its name to Reliance Delhi Power Private Limited in February 1995. Later, it changed its name to Reliance EGen Private Limited in January 2004, to Reliance Energy Generation Limited in March 2004, and to Reliance Power Limited in July 2007.[1]
The company website identifies project sites broadly to be located in western India (12,220 MW), northern India (9,080 MW) and northeastern India (2,900 MW) and southern India (4,000 MW). They include six coal-fired projects (14,620 MW) to be fueled by reserves from captive mines and supplies from India and abroad, two gas-fired projects (10,280 MW) to be fueled primarily by reserves from the Krishna Godavari Basin (the "KG Basin") off the east coast of India, and four hydroelectric projects (3,300 MW), three of them in Arunachal Pradesh and one in Uttarakhand.
Initial public offering and controversies
On January 15, 2008, the company attracted $27.5 billion of bids on the first day of its initial public offering (IPO), equivalent to 10.5 times the stock on offer, thereby, creating India's IPO record. The upper cut off price for the bid was Rs. 450 [2] The proposed IPO was to fund the development of its six power projects across the country whose completion dates are scheduled from December 2009 to March 2014.[3]
A media report suggested that, if the company’s stock price were to cross Rs. 650-700, Anil Ambani would go past L. N. Mittal to become the richest Indian.[4] "It is a reflection of world community in the future of India... Investors seem to be confident in the future of Indian economy," Indian Finance Minister, P. Chidambaram told the media about the IPO.[5]
The Securities and Exchange Board of India, which is an organization that regulates the activity in the Indian stock market, placed some restrictions based on a complaint about the formulation of the IPO.[6] The complaint also resulted in a public interest litigation being filed against the company. However, the Supreme Court of India passed a ruling that the IPO would go ahead even if any order is passed by any Indian court against the venture.[7]
Reliance Power debuted on the stock markets on February 11, 2008. However, the markets were still reeling after the January 2008 stock market volatility, and concerns over speculation that the issue was overpriced sent the stock plummeting soon after its listing. At the end of the day, the stock traded at a value that was 17 per cent lower than its issue price of Rs. 450 .
[8]. Investors who were betting on the stock reaching 1.5 or even twice its issue price lost a fortune in the process. On February 25, in an effort to mitigate investor losses, Reliance Power decided to issue 3 bonus shares for every 5 shares held.