‘From rags to riches’, that is the story of Dhirajlal Hirachand Ambani, popularly known as Dhirubhai Ambani. A couple of movies have been made on his incredible journey including ‘Guru’ directed by the renowned film maker Mani Ratnam. He has taken bits and pieces from Ambani’s life to construct the script. Thus, it can also be called an indirect biography of Ambani.
We now know Ambani, more popularly known as the Reliance Group, as an excessively well- established brand. It deals in information technology, energy, power, capital markets, logistics, textiles, telecommunications, oil, gas, retail and many more.
To begin with Dhirubhai’s story, he was born in Chorwad in Junagarh (Gujarat). His father was a school teacher in the village. However, the movie had shown Abhishek Bacchan playing the character of Gurukant Desai to be born in Idhar of Gujarat and his father being the headmaster of a school in the village.
Dhirubhai had later moved to Yemen at the age of 16. He would buy Rials, melt them in pure silver and sell them to traders in London. He then worked as a clerk and then in a Shell. Later he was promoted to the post of a manager in the oil-filling station at the Port of Aden. Dhirubhai made good use of his time and opportunity and learnt much about imports and exports, commodity trading, marketing, wholesale merchandising, and sales and distribution. He could meet people from various nationalities from whom he learnt currency trading and therefore, mastered accounting. In the process he discovered that he had a natural flair for speculative trading. Ambani understood the market trends over the years. He had an insatiable desire to be successful which is exactly what made him what he is today. As a young lad he lived in the boarding house with another twenty-five or so Gujarati clerks and office boys. He devoted most of his sleeping time in mastering English grammar, current affairs, essay writing and a host of subjects that interested him from week to week. He grabbed the English, Gujarati and Hindi daily papers and weeklies as soon as they arrived on the ship each day. He was an enthusiastic reader of all sorts of books, journals, magazines which the passengers left on the ship. Ten years after being in Yemen, he returned to India to start his own business, Reliance Commercial Corporation with a minimum capital of Rs.15,000. Champaklal Damani, his second cousin was his partner in his business who also stayed in Yemen with him. Initially the business of the Reliance Corporation was of importing polyester yarn and exporting spices in return. In the 1965, however, Champaklal and Ambani parted ways and Ambani started his own business. He started off with a minimal office 350 square feet. Damani was a cautious trader and was dicey about building yarn inventories, whereas, Ambani was known to take risks and believed in his plan of building inventories to heighten profit. Finally, Reliance Commercial Corporation was founded in 1966 and later became Reliance Industries on 08 May 1973. He launched ‘ Vimal ‘, a brand which sold polyester materials for suits, dresses, saris, shawls, etc.
Many aspects have been altered in the movie- Guru went to Turkey instead of Yemen, he started making money while playing ball tricks. But his working and promotions were kept intact.
Dhirubhai Ambani is credited with starting the equity cult in India. More than 58,000 investors from various parts (mainly rural) of India subscribed to Reliance’s IPO in 1977. Similarly, shown in the movie how huge gatherings were held in stadiums and fields like the Cross Maidan, Mumbai in 1986, attended by shareholders and people belonging from the Reliance Family.
In 1985, the name of the company was changed from Reliance Textiles Industries Ltd. to Reliance Industries Ltd. During the years 1985 to 1992, the company expanded its installed capacity for producing polyester yarn by over 145,000 tonnes per annum. The Hazira petrochemical plant was commissioned in 1991–92. In 1993, Reliance turned to the overseas capital markets for funds through a global depositary issue of Reliance Petroleum. In 1996, it became the first private sector company in India to be rated by international credit rating agencies. S&P rated Reliance “BB+, stable outlook, constrained by the sovereign ceiling”. Moody’s rated “Baa3, Investment grade, constrained by the sovereign ceiling”. In 1995/96, the company entered the telecom industry through a joint venture with NYNEX, USA and promoted Reliance Telecom Private Limited in India. In 1998/99, RIL introduced packaged LPG in 15 kg cylinders under the brand name Reliance Gas. The years 1998–2000 saw the construction of the integrated petrochemical complex at Jamnagar in Gujarat, the largest refinery in the world.
In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India’s two largest companies in terms of all major financial parameters. In 2001–02, Reliance Petroleum was merged with Reliance Industries. In 2002, Reliance announced India’s biggest gas discovery (at the Krishna Godavari basin) in nearly three decades and one of the largest gas discoveries in the world during 2002. The in-place volume of natural gas was in excess of 7 trillion cubic feet, equivalent to about 1.2 billion barrels of crude oil. This was the first ever discovery by an Indian private sector company. In 2002–03, RIL purchased a majority stake in Indian Petrochemicals Corporation Ltd. (IPCL), India’s second largest petrochemicals company, from the government of India. IPCL was later merged with RIL in 2008. In 2005 and 2006, the company reorganized its business by demerging its investments in power generation and distribution, financial services and telecommunication services into four separate entities. In 2006, Reliance entered the organised retail market in India with the launch of its retail store format under the brand name of ‘Reliance Fresh’. By the end of 2008, Reliance retail had close to 600 stores across 57 cities in India. In November 2009, Reliance Industries issued 1:1 bonus shares to its shareholders. In 2010, Reliance entered the broadband services market with acquisition of Infotel Broadband Services Limited, which was the only successful bidder for pan-India fourth-generation (4G) spectrum auction held by the government of India. In the same year, Reliance and BP announced a partnership in the oil and gas business. BP took a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the KG-D6 block for $7.2 billion. Reliance also formed a 50:50 joint venture with BP for sourcing and marketing of gas in India. In 2017, RIL set up a joint venture with Russian Company Sibur for setting up a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018.
He had to go through a lot of hardships before actually establishing his empire. The License Raj was rampant at the time Dhirubhai began his career. He had to break one rule after another in order to set up his business. As shown in the movie he had to create several dummy organizations so that he could prove his investors legitimate. Besides that, he had to face rivalry from another big businessman in his time, Nusli Wadia – chairman and majority owner of Bombay Dyeing who tried to but his entire company. On the other hand, Ramnath Goenka (owner and editor of the Indian Express) was very good friends with Ambani for quite some (which was performed by the character Manik Dasgupta), but after the dispute between Wadia, Goenka turned against Ambani and supported Wadia instead. Allegedly Ramnath Goenka is believed to have said, “Nusli is an Englishman. He cannot handle Ambani. I am a bania. I know how to finish him.” Goenka chose S. Gurumurthy (close confidante, chartered accountant and advisor) instead of appointing anyone else from his staff. As early as 1996, Outlook magazine addressed other controversies related to fake and switched shares; insider trading; and a nexus with the state-owned Unit Trust of India. Five main allegations concerning Reliance, and which have plunged the Indian capital markets into a period of uncertainty unsurpassed since the days of the securities scam were- Reliance was behind issuing fake shares, it switched shares which were sent for transfer only to make illegal profits, Reliance was also accused of insider trading in shares, Ambani wanted to monopolise telecom services with the help of front companies. Finally, Reliance established an understanding with Unit Trust of India for raising an immense sum of money to the detriment of UTI subscribers. Seminar magazine (2003) detailed Reliance founder Dhirubhai Ambani’s proximity to politicians, his enmity with Bombay Dyeing’s Nusli Wadia, the exposes by the Indian Express and Arun Shourie about illegal imports by the company and overseas share transactions by shell companies, and the botched attempt to acquire Larsen & Toubro. His political connections were also the talk of the town. There had allegedly been a meeting between Rajiv Gandhi and Ambani himself. Gandhi initially refused to give time to Ambani but once they met, Gandhi could not deny the offer given to him. Nothing was proven on paper but rumour had it that he was gaining closeness to the Bharatiya Janata Party. This was the result of the atrocious License Raj (during the Congress regime under Indira Gandhi) due to which almost every individual was getting affected. Even today, the company continues to have close relations with the BJP and most people claim that it is Reliance who is funding the Government and therefore, the BJP is in turn helping the company to flourish by providing excessive allowances. Business involves ethical and unethical doing, it depends where it takes the businessman as well as how badly does it affect the employees and the society. The movie had clearly drawn a picture of Guru getting involved in unethical dealings but it resulted in the profit of their investors. Everything was going hunky dory until all their secrets were published in the paper. Being right or wrong in business is all a matter of perspective. This man had crawled his way through extreme conditions to reach where he was, even if he had taken the ‘wrong’ path, we are no one judge it who have nothing to do with it. We cannot give moral verdicts if we have not traversed the same route as they did.
Dhirubhai Ambani was the backbone of his company and dealt with every single aspect of it by himself. However, following his first stroke in 1986, Dhirubhai handed over his company to his sons, Mukesh (the elder one) and Anil (the younger one). Soon differences between the two brothers came in the fore front and in November 2004, in an interview Mukesh admitted it. There was a dispute over the ownership issues. He also claimed that the differences “are in the private domain”. After Dhirubhai Ambani’s death on suffering from the second stroke, the group was split into two halves- Reliance Industries Limited headed by Mukesh, and Reliance Anil Dhirubhai Ambani Group headed by Anil. As of 2017, more than 250,000 employees work for the company. In 2012, Reliance Industries was one of the two Indian companies to be ranked among the top 100 in the Fortune 500 list of the world’s largest companies by revenue.
According to me, being able to dream big is one of the essential qualities that a leader should possess and Ambani had it. He belonged to a very humble background, around him not many people were ready to leave their simple life and travel abroad. Even after he had achieved quite a bit there, he decided to come back and start a business of his own. He was extremely strategic about his plans and a risk-taker. It was one of his capabilities to tackle crisis situations and say and do the right thing at the right time. He was an excessively smooth talker, depending on which he won over the various investors who crowd funded his enterprise. His connections and his ability to persuade and convince people was impeccable. He was very focused and confident about what he was about to do and knew exactly how to do it. Therefore, all these qualities make an ordinary person, a leader.