|Indian Legends >>|
Mohandas Gandhi and Dhirubhai Ambani were the two most famous scions of the Modh Bania, a Hindu commercial caste based in the arid Saurashtra peninsula of India's western Gujarat state. The Mahatma idealized traditional village ways, passive resistance, and homespun cotton. Ambani, a billionaire industrialist, preached prosperity to a burgeoning Indian middle-class via a business empire built on polyester.
Each changed India. Ambani's public wore his textiles as durable suits and glittery saris. Indians invested by the millions in his Bombay-listed Reliance Industries, a sprawling conglomerate with $12.3 billion in annual sales that recently became India's first privately owned entrant to the Fortune 500. When Ambani died on July 6 at age 69 after nearly two weeks in a stroke-induced coma, the country's media recounted his rags-to-riches life as an Indian morality play.
Dhirubhai Ambani, Indian businessman, was born in Chorwad, Gujarat, on December 28, 1932. He died in Bombay on July 6, 2002, aged 69. Dhirubhai Ambani is survived by his wife, two sons and two daughters. His two American-educated sons have been in day-to-day control of the company since he suffered a stroke in 1986. He suffered a further stroke 12 days ago from which he never recovered.
Dhirubhai Ambani - Entrepreneur who built up the only Indian business to feature in the Forbes 500 One of India’s most dynamic and flamboyant entrepreneurs, Dhirubhai Ambani was head of the multibillion-dollar Reliance group of industries with extensive interests in textiles, petrochemicals, energy and telecommunications. Combining a keen sense of business with a razor-sharp ability to negotiate his way through the labyrinth of the Indian political establishment, Ambani single-handedly built a business empire that in just three decades outgrew corporate houses such as the Tatas and Birlas which had dominated the country’s industrial landscape for nearly a century.
Reliance is the only Indian private company to make the Fortune 500 list of the world’s largest corporations, and Ambani was listed by Forbes as the 138th richest person in the world this year.
The son of a petty trader from a remote village in rural Gujarat, Dhirajlal Hirachand Ambani — known as Dhirubhai — moved to Aden as a teenager in order to seek his fortune. He started work as a petrol station attendant before taking up a clerical position for an oil company that was the sole distributor of Shell products there. While in Aden, home to many Gujarati expatriates, he realised that a discrepancy between the rial-sterling exchange rate and the intrinsic value of the silver content in Aden’s coinage afforded an excellent opportunity to make money. This arbitrage generated some $3,000 in seed money for the modest trading enterprise that Ambani set up when he returned to Bombay in 1958.
The trading house Reliance Commercial Corporation began by importing polyester yarn and exporting spices. This was the era of India’s infamous “licence-permit raj”, when businessmen with political connections could corner export, import and manufacturing licences and accumulate huge fortunes.
Sensing an opportunity in the textile industry — higher disposable incomes were leading to Indians buying better, more expensive clothes — Ambani sought and received the necessary clearances to manufacture cloth from polyester fibre. He opened his first textile mill in Naroda, near Ahmedabad, in 1966 and then concentrated on quietly building up his business. Vimal, the textile brand he established, flourished and remains a household name in India today.
Though Reliance was a profitable enough concern, Ambani quickly calculated that further expansion — especially into related sectors — would depend on access to a cheap source of capital. Rather than turning to the banking system, he decided to tap Bombay’s fledgeling stock exchange, pioneering an equity cult that was to transform the corporate financing system in India. Reliance’s initial public offering in 1977 saw 58,000 investors buying shares; eventually, the number of Reliance shareholders was to climb to some three million.
To Indian middle-class salary-earners, Ambani held out the promise of instant enrichment through the stock market. But he was no fly-by-night operator: Reliance shares offered genuine value, and those fortunate enough to have had faith in the company in the early years eventually became millionaires. Annual general meetings were held in sports stadiums where Ambani would be treated by shareholders with adulation and even reverence.
In 1982 Ambani began the process of backward integration, setting up a plant to manufacture polyester filament yarn. He subsequently diversified into chemicals, gas, petrochemicals, plastics, power and telecom services.
By the late 1980s the Reliance group was one of India’s most influential and profitable concerns. However, the phenomenal growth of Reliance owed as much to Ambani’s acumen as to the ease with which he was able to get official rules and regulations — including import tariffs — introduced, amended or scrapped in order to undercut his rivals and push his own business interests. His methods earned him many bitter enemies in India’s corporate world. Ambani nevertheless forged ahead, cultivating friends in virtually every Indian political party and managing the media in such a way that critical stories about Reliance’s unconventional business methods seldom made it into the newspapers.
The final phase of Reliance’s diversification occurred in the 1990s when the company turned aggressively towards petrochemicals and telecommunications. But, like most business people, Ambani had rivals, the most bitter of whom was Nusli Wadia, of Bombay Dyeing, a patrician entrepreneur whose company was well established in the textile industry.
Ambani was also anxious to encourage the spread of information technology among India’s poor. Through Reliance Industries he arranged computer education and training for thousands of students in schools in Bombay. “You are getting an opportunity. Make the best use of it,” he told children in December during one of his last public speeches. “Be daring. Think big. You can be the best. If you believe in this, you will be the best.”
Ambani also saw the Indian Government’s privatisation programme as a means of further growth. Two months before his death, Reliance successfully bid for the giant public sector Indian Petro-Chemicals.
His two American-educated sons have been in day-to-day control of the company since he suffered a stroke in 1986. He suffered a further stroke 12 days ago from which he never recovered.
Dhirubhai H Ambani rose from humble beginnings to become chairman of India's largest private sector company. In one of his more candid moments, the otherwise reticent tycoon summed up the secret of his remarkable success story. Even those who question his business dealings... readily concede that Ambani had a vision and matchless business acumen
Think big, think fast and think ahead. Born in 1932 to a school teacher father in the small village of Chorwad in western Gujarat state, Ambani followed this advice all his life. He dreamt big even as a small boy when he used to sell hot snacks to pilgrims outside a temple in his native village. And he did not stop dreaming big even when he went to Aden as a petrol pump attendant at the age of 17 to help support his family. It was this desire to make it big in life which prompted his return to India in 1958. Ambani came to Bombay and started his first company, Reliance Commercial Corporation, a commodity trading and export house.
The company was set up with an investment of 15,000 rupees (about $375). Forty-four years later Reliance has grown into a conglomerate with an annual turnover of $13.2bn. It is the only Indian private sector firm in the Fortune 500 list. In the process, the company has also acquired one of the world's largest groups of shareholders, with over four million investors putting their faith in its stock. In 1966 the Reliance group opened its first textile mill in Naroda in Ahmedabad. The textile mill won accolades in 1975 from a World Bank technical team, who described it as "excellent by developed country standards".
Two years later the company went public, evoking a tremendous response from investors. That made Ambani something of a revered figure among the stock investors' fraternity, who held him in awe from then on. They credit the Reliance chairman with introducing a stock market culture in the country. In the 25 years since it went public Reliance has become more than just a textile industry player. It now has interests in power, telecoms, petrochemicals and life sciences as well. Under Ambani's guidance it became one of the biggest first-generation success stories in Asia. Its founder will go down perhaps as the most controversial industrialist in India's corporate history.
He was known for assiduously cultivating those in positions of power. Many observers attribute his phenomenal rise to his close contacts with the Congress leadership in the 1970s and 1980s. But even those who question his business dealings - especially in the earlier years of Reliance - readily concede that Ambani had a vision and matchless business acumen. While he and his family may have begrudged what they thought was insufficient recognition from his peers and the press till the 1980s, all that changed in the last decade, during which the Reliance family really flourished. Asiaweek magazine voted Ambani amongst the 50 most powerful men in Asia - not once but three times, in 2000, 1998 and 1996.
The federation of Indian chambers of commerce and industry (FICCI) conferred on him the Indian entrepreneur of the 20th Century award. A poll conducted by The Times of India in 2000 voted him "creator of wealth in the century". And in December 2000 Ambani was honoured at a civic reception by the municipal corporation of Bombay. His sons, Mukesh and Anil, both of them groomed in business by their father, have turned into great business leaders in their own right. Rags to riches is click that is often applied to describe the climb up the ladder of even modestly successful businessmen. But it could hardly be more appropriately used than to trace the meteoric rise of Dhirubhani Ambani, Chairman of high flying Reliance Industries, rated among the top three business groups in India today.
From an initial investment of a mere Rs. 15000 in 1958 to start a trading house, followed by the setting up of his own tiny manufacturing facility in Gujarat in 1966, Ambani, Son of a rural school teacher, has managed to build up a synthetic yarn, textiles and petrochemicals empire that is today the third largest private sector mega corporation.
For the year ended March 1991, Reliance Industries is understood to have recorded a sales turnover of Rs. 2,300 crores ( more than US $ 1 billion), making it the third largest private corporation in the country to day. Those who predicted that he was a conman, a confidence trickster, have had to eat their words. I am the dubble that burst! chortles Dhirubhai, sarcastically referring to the negative headlines that greeted his forays into the primary capital market in the early- 1980s.
Success on such a gigantic scale inevitable excites jealousy and enmity; and Ambani, today 58, has had to deal with his share. Reliances have been the subject of several exposes in the press. But these have neither fazed the tycoon extraordinaire, nor halted the inexorable progress of his march forward towards his goal of becoming the undisputed No.1 in the country.
To any sort of sniping in the press, Dhirbhai has responded with stoic silence. Rarely has he reacted to even the most stringent media criticism. In the last couple of years, though, he has taken a leaf out of industrialist-cum press baron Ramnath Goenkas book. He has taken the precaution of shoring up his own strength in the media, not minding the expenditure of huge sums of money, and timing the launches of his products to a nicety.
Though not as physically hardy as before, Dhirubhai has not let the permanent handicap of the paralytic stroke blunt the edge of his razor-sharp brain. It is still from his fourth floor office in Maker tower IV at Nariman point that all major policy decisions which affect the future of the Reliance group are taken. The routine running of the organization is left to Mukesh and Anil, who nevertheless consult him in all key matters.
There are some opinion-makers, like well-known newspaper editor Vinod Mehta, who have referred in print to Dhirubhai Ambani as the embodiment of evil; However, to the Gujarati business community, he has assumed the status of demi-god. To al aspiring small-time entrepreneurs, he has become a sort of benchmark they aim at. And so, with each succeeding day, the legend to Dhirubhai Ambani continues to gather spice.