Dhirubhai Ambani
From Wikipedia, the free encyclopedia
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| Born: | December 28, 1932 Chorwad, Gujarat |
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| Died: | July 6, 2002 Mumbai, Maharastra |
| Occupation: | Industrialist |
| Website: | www.ril.com |
Dhirajlal Hirachand Ambani (28 December 1932, - 6 July 2002), better known as Dhirubhai Ambani, was an Indian business tycoon and founder of Reliance Industries Limited.
[edit] Early Life
Dhirajlal Hirachand Ambani was born on 28 December 1932, at Chorwad, Junagadh in the state of Gujarat, India, into a Modh family of very moderate means. He was the third son of a school teacher. When he was 16 years old, he moved to Aden,Yemen. Initially Dhirubahi worked as a despatch clerk with A. Besse & Co.. Two years later A. Besse & Co. became distributor for Shell products and Dhirubhai was promoted to manage the company’s oil-filling station at the port of Aden. He was married to Kokilaben and had two sons and two daughters.[1]
[edit] Life in Aden
In the 1950s the Yemini administration realized that their main unit of currency Rial was in disappearing. After investigating the matter it was realized that all Rials were routed to the Port City of Aden. There a young man in twenties was placing unlimited buy orders of Yemini Rials.
During those days the Yemini Rial was a pure silver coin and was much in demand at the London Bullion Exchange. Young Dhirubhai would buy Rial, melt it in pure silver and sell it to bullion traders in London . In the later part of his life while talking to reporters it is believed that he said “The margins were small but it was money for jam. After three months, it was stopped. But I made a few lakh of rupees. I don’t believe in not taking opportunities.” [2]
[edit] Reliance Commercial Corporation
Ten years later, Dhirubai returned to India and started a business Reliance Commercial Corporation with a capital of Rs. 15000.00 (US$ 375). The primary business of Reliance Commercial Corporation was import polyester yarn and export spices.
The business was setup in partnership with Chambaklal Damani, his second cousin who was also there with him in Aden, Yemen. The first office of Reliance Commercial Corporation was set up at Narsinathan Street at 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 in their business. In 1965 Chambaklal Damani and Dhirubhai Ambani ended their partnership and Dhirubhai started on his own. It is believed that both had different tempermants and a different take on 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 buliding inventories with anticipating a price rise and making some profit is good for growth. [3]
During this period Dhirubahi and his family used to stay in an one bedroom apatment in Jaihind Estate in Bhuleshwar. In 1968 he moved from the chawl to an upmarket apartment at Altamount Road in South Mumbai. Mumbai[4] His first car was Premier Padmini, the Indian version of Fiat 1100, later he brought a Mercedez-Benz Car. In 1970s he brought a white Cadillac Car.[5]
[edit] Reliance Textiles
Sensing good opportunity in the business of textiles, Dhirubhai started his first textile mill at Naroda, near Ahmedabad in the year 1966. Textiles were manufactured using polyester fibre yarn.[6] Dhirubhai started the brand "Vimal", which was named after his elder brother Ramaniklal Ambani's son Vimal Ambani. Externsive marketing of the brand "Vimal" in the interiors of India made it a household name. Franchise retail outlets were started that used to sell only "Vimal" brand of textiles. In the year 1975 a Technical team from the World Bank visited Reliance Textiles' Manufacturing unit. This unit has the rare distinction of being certified as "excellent even by developed country standards" in that period. [7]
[edit] Inital 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 Gujrat that being shareholders of his company will only bring returns to their investment.
Reliance Industries holds the distinction that it is the only Public Limited Company whose several Annual General Meetings were held in stadiums. In 1986, The Annual General Meeting of Relaince Industries was held in Cross Maidan, Mumbai, was attended by more than 30,000 shareholders.
[edit] Dhirubhai's Control Over Stock Exchanges
In 1982 Reliance Industries was coming up with a rights issue of partly convertible debentures.[8] It was rumored that the company is making all efforts to ensure that the stock prices did not slide a 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 as "Friends of Reliance" started to buy the short sold shares of Reliance Industries on Bombay Stock Exchange.
The Bear Cartel was acting with a belief that the Bulls will be short of cash to complete the transaction 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 a back 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 brought shares of Reliance by none other than Dhirubhai Ambani. In case of non-settlement the Bulls demanded an "Unbadla" (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 enormous uproar in the market and Dhirubhai Ambani was the unquestioned king of the stock markets. He proved to his detractors as to how dangerous it is to play with Reliance.
The situation was completely out of control. To get a solution for this situation the Bombay Stock Exchange was closed for three business days. Authorities of Bombay Stock Exchange intervened in the matter and brought down the "Unbadla" rate to Rs. 2 with a stipulation that the Bear Cartel has to give the delivery of shares within few days. The Bear Cartel brought shares of Reliance from the market at higher price levels and it was also realized that Dhirubhai Ambani himself supplied those shares to the Bear Cartel and earned a healthy profit out of The Bear Cartel's adventure [9]
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 so much of cash flow during the crisis. The answer to this was provided by then finance minster Pranab Mukherjee] in the parliament. He informed the house that Non-Resident Indian had invested upto Rs. 220 Million in Reliance during 1982-83. These investments were routed through many companies like Crocodile, Lota and Fiasco. These companies were primarily registered in Isle of Man. The interesting factor was 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.[10]
[edit] Diversification
Over time his business has diversified into a core specialisation in petrochemicals with additional interests in telecommunications, information 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".
[edit] Criticism
Despite his almost Midas Touch, Ambani has 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. [11] He has also been known to have links with the V P Singh government [12] and later the BJP government. He has been accused of having manipulated government policies to suit his own need, and has been known to be a king-maker in government elections [13]. 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.
[edit] Unauthorized Biography
Hamish McDonald, who was the Delhi bureau chief for the Far Eastern Economic Review for several years, published an unauthorised biography of Ambani in 1998 in which both his achievements and shortcomings were reported, but it was banned in India by the Ambanis who have threatened legal action if the book is published in the country [14].
[edit] Death
Dhirubhai Ambani was admitted to the Breach Candy Hospital in Mumbai on June 24, 2002 due to a major "brain stroke" suffered by him. This was the second stroke, the first one had occurred in the year February 1986 and had kept his right hand paralyzed. He was in a state of coma for more than week. A battery of highly efficient 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 the 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 Salgaocar.
The country has lost iconic proof of what an ordinary Indian fired by the spirit of enterprise and driven by determination can achieve in his own lifetime. [15].
[edit] Film
A film inspired by the life of Dhirubhai is set to release in January 2007. The Hindi Film Guru, directed by Mani Ratnam and music by A.R.Rahman will show the struggle of a man who strives to make his mark in life. The movie stars Abhishek Bachchan and Aishwarya Rai in leading roles
[edit] Awards and Recognitions
- November 2000 – Conferred 'Man of the Century' award by Chemtech Foundation and Chemical Engineering World in recognition of his outstanding contribution to the growth and development of the chemical industry in India
- 2000, 1998 and 1996 – Featured among 'Power 50 - the most powerful people in Asia by Asiaweek magazine.
- June 1998 - Dean's Medal by The Wharton School, University of Pennsylvania, for setting an outstanding example of leadership.
- August 2001 – The Economic Times Award for Corporate Excellence for Lifetime Achievement
- Dhirubhai Ambani was named the Man of 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".
[edit] Famous Quotes
From beginning Dhirubhai was seen in high-regard. His success in the petro-chemical business and his story of rags to riches made him a cult figure in the minds of Indian people. As a quality of business leader he was also a motivator. He gave very less of public speeches but the words he has spoken are still remembered for their value.
- "Growth has no limit at Reliance. I keep revising my vision. Only when you dream it you can do it."
- "Think big, think fast, think ahead. Ideas are no one's monopoly"
- "Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our efforts greater. This is my dream for Reliance and for India."
- "You do not require an invitation to make profits."
- "If you work with determination and with perfection, success will follow."
- "Pursue your goals even in the face of difficulties, and convert adversities into opportunities."
- "Give the youth a proper environment. Motivate them. Extend them the support they need. Each one of them has infinite source of energy. They will deliver."
- "Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth"
- "We bet on people."
- "Meeting the deadlines is not good enough, beating the deadlines is my expectation."
- "Don't give up, courage is my conviction."
[edit] Further reading
- Hamish McDonald, The Polyester Prince (1998)
- Reliance's Success Story
[edit] See Also
[edit] External Links
- Dhirubhai Ambani: How Numbers Shaped His Life, Indiatimes AstroSpeak
- Remembering the Prince of Polyester Time Magazine Monday, Jul. 15, 2002
- Dhirubhai Ambani in Memoriam, Rediff.com
- Dhirubhai Ambani addressing at the ChemTech Foundation - PharmaBiz.com - Thursday, January 23, 2003
- Dhirubhai gave management a whole new 'ism' A.G. Krishnamurthy on Rediff.com
- Great lessons from Dhrirubhai Ambani A.G. Krishnamurthy on Rediff.com
[edit] Reference and Notes
- ^ A Short Biography of Dhirubhai Ambani on Reliance Communications Ltd. (PDF File)[1]
- ^ Vignettes from an action-packed life, EquityEquation.com[2]
- ^ Vignettes from an action-packed life, EquityEquation.com[3]
- ^ The two faces of Dhirubhai Ambani by Paranjoy Guha Thakurta[4]
- ^ Vignettes from an action-packed life, EquityEquation.com[5]
- ^ Indian Legends, Dhirubhai Ambani. Accessed Oct, 28. 2006.[6]
- ^ A Short Biography of Dhirubhai Ambani on Reliance Communications Ltd. (PDF File) [7]
- ^ The two faces of Dhirubhai Ambani by Paranjoy Guha Thakurta [8]
- ^ The Great Indian Scam, Story of Missing Rs. 4000 Crore by S.K. Barua and J.S. Verma ISBN 8170941288 P 16 & 17
- ^ For this fighter, life was a big battle Manas Chakravarthy on Rediff.com
- ^ BJP’s Face Once Again Bared
- ^ Dhirubhai Ambani And The Stories That Need Telling
- ^ Remembering the Prince of Polyester
- ^ Ambani: A tycoon for all seasons
- ^ BBC News UK [9]
