Reliance Industries

Great Indian Business Legacy -- Reliance
PREFACE
Growth is Life
WHY ONLY DHIRUBHAI?
Growth is Life

It did not take me a long time to decide my project topic, as I was very sure about doing such a project that has always fascinated me. Only thing that took me a long time was to decide which Indian business legacy to work on. There have been wonderful Indian businessmen over the years that have put their names on the business map of the world. They have not only brought glory to themselves but also to our Mother India. They not only worked hard but also smart. They seized the opportunities as and when it appeared. They are Badshahs of their own field. Some are rags to riches and some were born with a silver spoon. Some were college dropouts while some were masters from various famous schools. All have made a good fortune but one name that stands apart from all is Dhirubhai Ambani. Born to a schoolteacher in the tiny village of Chorwad he always dreamt big from childhood days. He taught the common man to think big and he initiated the equity cult. He was the man who provided indirect employment to 3 million Indians. The most significant thing about him is that he not only survived the license raj but also grew after 1991 (liberalisation of Indian economy). Not only he had beautifully managed the brick and mortar companies but also was about to implement the new age projects. Although he had left taking active part in the day to day affairs of the company he always had the say in implementing major projects of reliance. His no would mean that Reliance would not implement that project. He was the messiah of the common investor. He never recognized failures. He had that uncanny knack of gut feeling about success. He rewrote the rules of the game of business and had trained his two sons for the future. He is the best example of a start-up strategy. But the truth remains that Reliance could be vulnerable after Dhirubhais death. It remains to be seen where Mukesh Ambani takes Reliance from here onwards. He not only has the extra responsibility of being the karta of the reliance family but also has to ensure that the relationship with his brother will stay as good as it was when dhirubhai was alive. Where will reliance go from here??? Only time will tell.
Growth is Life

This story about Reliance includes every ingredient required to script great success stories.
Growth is Life
SUMMARY
I have tried to cover in my project the story of a common person who succeeded in life due to sheer determination. All the aspects of Reliance right from its inception and its current status are covered in the project. The major aspects of my project include the milestones of Reliance in the past decade, Reliances impact on Indias economy, its humble beginnings, the Growth of Reliance, Pre-globalisation license Raj, mergers and acquisitions, the Equity cult and the ups and downs of Reliance. Also this project gave me an opportunity to script what lessons we as management students can learn from Dhirubhai. We as management students can learn more from Dhirubhai Ambani than some of the text books. Also covered in the project is the SWOT analysis of Reliance. The comparison between the two brothers Anil and Mukesh is worth noting. A section on new age companies of Reliance and how it will benefit from these companies is also written. One more interesting thing covered is how the two brothers have successfully been able to manage and expanded the great Emprire of Reliance. Also, perceptions of the corporate world and the student community have been inculcated in the project to reiterate the fact that Reliance is a truly great company.
Growth is Life
DHIRUBHAIS
LEGACY:
A RS 65,000-CRORE
EMPIRE
Reliance Industries Ltd (RIL), Indias largest private sector company, has come a long way from its humble beginning, thanks to Dhirubhai Ambani. The Reliance Group has over 10 companies under its fold now. All companies function in a much centralised style of management, and were cherished under Dhirubhais firm authority on his empire. The companies are: Reliance Industries Limited, Reliance Capital Limited, Reliance Capital Mutual Fund, Reliance Industrial Infrastructure Limited, Reliance Energy, Reliance Telecom, Reliance Infocomm, Reliance General Insurance Co Ltd, Reliance Life Sciences, Indian Petrochemicals Corporation Ltd. The Rs 65,000-crore Group has grown by leaps and bounds over the last five decades. The company was conceived with an investment of as less as Rs 15,000, and today, it is the largest private sector company in India. It now boasts of a total sales of Rs 65,000 crore, net profits of Rs 4,400 crore, cashflow of Rs 6,800 crore and total assets of Rs 55,000 crore. The company also figures in the list of Fortune 500 companies at the 425 mark, with interests in textiles, synthetics fibers, fiber intermediates, petrochemicals, refining, oil and gas, financial services, insurance, power, telecom and infocom initiatives. Looking forward, the task ahead for Anil and Mukesh is to maneuver the Group through the 21st century, at the same pace as earlier. New forays into telecom (where it is a late entrant) and biotech will be critical for the Group to develop a strong gameplan. The company is making investments in retailing in the petroleum sector which would ensure huge returns. The company has already chalked out a Rs 500-crore plan for this. It owns a textile manufacturing facility at Naroda near Ahmedabad in Gujarat, fibres, fibre intermediates and chemicals at Patalganga near
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Mumbai, polymers, chemicals, fibres and fibre intermediates in Hazira and a refinery at Jamnagar. The Group also has a 30 per cent stake in Panna, Mukta and Tapti oil and gasfields in north-west Mumbai. It has made forays into new initiatives in telecom, power, engineering, procurement and construction, infrastructure, infocom, insurance, coal-bed methane (CBM) and life sciences. It has grown tremendously over the last decade when the Governments economic reforms set free the countrys business environment from the earlier shackles of licensing, Fera and high taxes. Since it went public in 1977, Reliance has set several corporate records. One of these is for growth in its assets. Over the years, the company has rewarded its shareholders handsomely. Anyone who resisted the markets skepticism when the firm went public in 1977, invested even a small amount in debentures and shares, and purchased all subsequent additional rights offerings, has seen his money multiply to well over a hundred times the original investment. In 1985, Reliance notched the record of collecting Rs 400 crore from an estimated 1.5 million investors through the issue of non-convertible debentures. Today, nearly three million people hold shares in RIL and its sister concerns. In 1985, Reliance notched the record of collecting Rs 400 crore from an estimated 1.5 million investors through the issue of nonconvertible debentures. The group owns the worlds largest grass root refinery at Jamnagar in Gujarat with a capacity of 27 million tonnes per annum. It is the first and the only refinery to be set up in the private sector in India. The company is also expected to hike capacity to 54 million tonnes in the Tenth Plan. The group is today Indias largest business house and has been chosen as Indias Most Admired Business House in the Taylor Nelson Sofres-Mode survey for 2001, conducted for Business Barons magazine, June 2001. With the merger of Reliance Petroleum Ltd into RIL, the merged entity has the distinction of becoming Indias first private sector company to feature in the internationally tracked Fortune Global 500 list of the worlds largest
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corporation. The merged entity also ranks among the top 225 companies globally in terms of net profits, among the top 300 companies globally in terms of net worth among the top 425 companies globally in terms of assets and among the top 500 companies globally in terms of sales. Reliance is the largest exporter from India, with exports crossing $2 billion. The company already exports to over 100 countries, which displays its global competitive strengtha dream that its founder Dhirubhai would have loved to pursue.
Growth is Life
RELIANCE - MAJOR MILESTONES

1992-2004
Glorifying the past decade 1992
Offered the first ever Euro Issue of Global Depository Receipts by an Indian company Set a record with Reliance Twin issues that received over 1 million investor
Applications 1993
Sales crossed Rs. 4,000 crores making Reliance Indias largest private sector company Offered the first Euro Convertible bond issue Indias largest public offering Reliance Petroleum Issue
1994 Offered the second Euro issue of GDR
1995
Net profit crossed the Rs.1,000 crore mark (Rs 1,065 crores or US$ 338 million), unparalleled in the Indian Private sector
1995-96
Reliance became the first private sector company to be rated by international credit rating agencies. S&P rated BB+, stable outlook, constrained by the Sovereign Ceiling. Moodys rated Baa3, Investment grade, constrained by the Sovereign Ceilings
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1996-97 Completion of Rs. 9,000 crore (US $ 2.5 billion) Hazira complex increasing production capacity from 1.5 million tonnes to more than 6 million tonnes 1997 First corporate in Asia to issue 50 and 100 years bond in US debt market 1999-2000 Jamnagar Petrochemicals complex and bulk of integrated refinery complex commissioned comprising: Worlds largest grassroots refinery,Indias largest port and World class product handling, storage and despatch facilities. 2000 Started commercial production of 27 million tpa refinery, the 5th largest in the world Increased stake in BSES by an open offer Launched share buyback program Reliance Infocom plans announced
2001
RIL and RPL become Indias two largest companies in terms of all major financial parameters
2002 RPLs merger with RIL to create Indias first and only private sector Fortune Global 500 company Reliance acquires governments 26% stake in IPCL, Indias 2nd largest Petrochemicals Company
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Launch of Reliance Infocomm in December
2003
BSES becomes part of the Reliance Group Mr. Anil D. Ambani Appointed BSES Chairman Reliance enters World's Most Respected Companies List( financial times) Reliance Life Sciences and Thyrocare Technologies Limited join hands to offer Molecular Genetic Testing Services Reliance bags IMC National Quality Award for Hazira plant RIL - First Indian private sector company to record net profit of over Rs 4,000 crore in one financial year Mukesh Ambani nominated as Chairman of the Foundation for the International Federation of Red Cross and Red Crescent Societies Reliance and DuPont Polyester Technologies Sign Agreement for R&D Strategic Alliance Reliance ranked in the Forbes Global 500 Reliance bags FIEO Export Awards Reliance announces Strategic Alliance with BRPL ( subsidiary of IOC) Reliance in 2003 - A year of challenges and achievements Reliance wins National Energy Conservation Award Reliance in Top 2 'Overall Leadership' amongst Indian companies Reliance gets National Award for Excellence in Corporate Governance 'Sword of Honour' for Reliance - British Safety Council Award for Excellence in Safety Reliance gets an award for Corporate Social Responsibility
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2004
Reliance Refinery Emerges World Leader in Energy Performance
- Best Performance in Asia-Pacific region Reliance to set up World's largest gas based power project of
3,500 MW capacity in Uttar Pradesh, India Ambanis on the cover of 'Time' Reliance Group emerges as India's Largest Wealth Creator in the First private sector company in India to record a Net Profit of US
private sector for the Year 2003-04 dollar over 1 billion
Reliance Industries wins NASSCOM's 'IT Excellence Award' Mukesh Ambani voted world's most influential person in
Telecoms in 2004 Reliance Industries ranks No.2 in 'India's Most Respected
Companies' survey Reliance has proved that with laser-sharp management and vision it is possible to defy worldwide trends like falling petrochemical prices and factors such as the South East Asian crisis, which have taken a toll of many other Asian corporates. Reliance has one of the largest marketing networks in the Indian industry. All its brands are market leaders.
There was only one driving force behind all these achievements, and that is Dhirubhai Ambani!!!!!!!!
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RELIANCE: - DOES INDIA THE
RELY ON
RELIANCE???
FIGURES REVEAL:
India's No. 1 Business Group

Founded as a textile mill in 1966 by Dhirubhai H. Ambani, the Chairman of the Reliance group, Reliance continued to be a textile company until early 1980s. However, seizing the opportunities emanating from the growing Indian economy as well as the opening up of the regulation-driven sectors of the economy such as petrochemicals, plastics etc., Reliance pursued the policy of backward integration from textiles as well as diversification from the early 1980s onwards to set up world-scale facilities for manufacturing polyester and textile intermediates, plastics and polymer intermediates, detergent intermediates etc. Today Reliance is the largest, fastest growing and most valuable business group in India. Reliance Group is India's largest business house with total revenues of Rs 62,000 crores (US$ 13.2 billion), cash flow of over Rs 6,800 crores (US$ 1.5 billion), net profit of over Rs 4,400 crores (US$ 950 million) and exports of Rs 9,370 crores (US$ 2 billion). The Group has total assets of Rs 55,000 crores (US$ 11.8 billion) and market capitalisation of around Rs 60,000 crores (US$ 12.7 billion). Diversified business interests Reliance group's business activities encompass all major growth sectors of the Indian economy: - Oil & gas exploration - Refining & marketing - Petrochemicals including intermediates - Textiles
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-Energy - Telecom - Information Services - Insurance - Financial services and so on India's top private sector company Reliance Industries Ltd. (RIL) is India's top private sector companies in term of all major financial parameters. RIL is the largest private sector company in India in terms of net worth, assets and net profits, and is second only to RPL in term of sales. Other major companies in the Reliance group are Reliance Capital Ltd., Reliance Industrial Infrastructure Ltd., Reliance Power Ltd., Reliance Telecom Ltd., Reliance InfoComm Ltd., Reliance Life Insurance Company Ltd, Reliance General Insurance Company Ltd. Market leader in India Reliance holds major market shares for all its major products in India Polyesters (Filament Yarn, Staple Fibre and Resin) Fibre Intermediates (Purified Terephthalic Acid, Mono Ethylene Glycol, P-Xylene) Polymers (Polyethylene, Polyproplene, PVC) India's largest exporter With all its products conforming to the highest international quality standards, Reliance is India's largest exporter with exports of Rs.9, 370 crores or US$ 2 billion in the fiscal year 2001. Individually, too, RIL and RPL are India's top two exporters. Role in the Indian economy 55 % 77 % 50 %
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The Reliance group's leadership position in India is reflected in its all round contribution to the Indian economy. The Reliance group contributes
3.5% of Indias GDP 6% of Indias total exports 10% of Indian governments indirect taxes.
Global rankings Having world-scale manufacturing facilities for all its major products, Reliance ranks among the global top ten in all its major products: Product Paraxylene Polypropylene Polyester Filament Yarn (PFY) Polyester Staple Fibre (PSF) Purified Terephthalic Acid (PTA) Mono Ethylene Glycol (MEG) Role in the Indian corporate sector: Global rank 3 5 5 5 5 10 Rank in Asia-Pacific region 1 1 3 3 3 1
RIL alone accounts for:

17 per cent of the total profits of the private sector in India 7 per cent of the profits of the entire corporate sector in India 6 per cent of the total market capitalisation in India Weightage of 13 per cent in the BSE Sensex Weightage of 10 per cent in the Nifty Index
Reliance Infocomm
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Reliance Infocomm (RIC) is India's largest mobile service provider with over 7 million customers. Reliance Infocomm has established a pan-India, high-capacity, integrated (wireless and wire line) and convergent (voice, data and video) digital network, to offer services spanning the entire Infocomm value chain - infrastructure, services for enterprises and individuals, applications and consulting.
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HUMBLE BEGINNINGS
OF
RELIANCE
While Dhirubhai is arguably the best Indian businessman of the century he always told the media people to report his past life - A life full of struggles and simple livelihood. He wanted to communicate to every Indian that though he might be living in poverty now he can definitely make a future out of sheer determination and hard work.
AMBANIS FAMILY TREE
Hirachand Govardhandas
Ramniklal
Dhirubhai
Natwarlal
Trilochanabe n
Jasumatibe n
Anil
Mukesh
Dipti
Nina
Dhirajlal Hirachand Ambani (Dhirubhai is a nickname) came from a tiny village that is not even a dot on the political map of Gujarat. But Chorwad, in Junagadh district, today remembers that its most famous scion. Born on December 28, 1932 he was the progeny of a humble schoolteacher, and that he could not go in for higher education simply because there was no money in the family kitty. According to Ramniklal, the eldest son, his younger brother was always thinking of moneymaking schemes. During the Mahashivratri Fair,
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Dhirubhai got together with some friends and sold Ganthia, a Gujarati savoury, he recalled. Adds a Chorwad contemporary, Dhirubhai was a familiar sight here, cycling from village to village. All he needed was the whiff of a business opportunity and he was off to book the orders. As soon as Dhirubhai had matriculated, it was time to shut his books and get to work. At the age of 17, he shipped out for the Arabian peninsular city of Aden, to join Shell, where he learnt a lot about the oil business. From that point onwards, his rise has been generally steady and occasionally meteoric. Soon he graduated to clerkdom in a general merchandising firm, A. Besse & Co, an affiliate of Burmah Shell. The Jewish proprietor of the agency must have seen some exceptional qualities in the young man; and by the time he was 24, Ambani was already the general marketing manager for Burmah Shell products. Any middleclass Indian would have been euphoric to have achieved so much success at such a young age, and clung to the job like glue. Not Ambani. He wanted his own business, he wanted to put to work the precepts he had picked up on the job. For a while, he worked in a totally unrelated business-representing people whose insurance claims had been rejected, and splitting any settlements he was able to negotiate. At the age of 26, he returned to India and set up a firm for exporting spices and other commodities to Aden. Reliance Commercial Corporation, a commodity trading and export house, was put up in 1958 at an outlay of Rs. 15,000. While the firm specialized in ginger, cardamom, turmeric and fabrics, it was not averse to taking on any other item. At first, Dhirubhai could not afford an office of his own, so he rented desk space for two hours a day. He, wife Kokilaben and four children (two sons, two daughters, in that order) lived in a cramped tworoom flat in a crowded chawl in a Bombay slum, sharing communal lavatories.
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I remember, as children, my elder brother Mukesh and I had to share clothes, and our only playgrounds were the gullies in the area, recalls Anil, the younger of the Ambani sons. Dhirubhai has never looked back. Most top Indian corporate bosses at the time were content to sit behind the walls of governmental protectionism on the imports front, and earn profits from marketing frequently shoddy, high-priced products based on obsolete technology. In contrast, Ambani showed that he could combine the inborn shrewdness of the Gujarati businessman with an almost American style of entrepreneurial selfconfidence and a Japanese willingness to invest in the latest technology. For a long while, he indulged in buying and selling synthetic fibers and textiles. He was a small-time, paan-chewing trader, with a persuasive manner and a razor-sharp brain for finance, recalls Virenchee Sagar, former Managing Director of Nirlon Chemicals and Synthetic Fibres Limited. In the early 1960s, he used to buy regularly from us; by the start of the 1980s, we were buying a lot of our own raw material from him! Very early in his new venture, Dhirubhai picked up the art of profiting from the Byzantine system of controls that were guaranteed to choke the enthusiasm out of other entrepreneurs. He exported spices, and used replenishment licenses to import rayon. Later, when rayon began being manufactured in India, he exported rayon and imported nylon. Still later, he exported nylon and imported polyester. He was always a step ahead of the main competition looking ahead and scoring bulls-eyes with most of the bold steps he took. With the imported items being heavily in demand, his profit margins were rarely under 300 per cent. (He admits to having made 700 per cent on one occasion!)
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There were occasions when we exported rayon at a loss, because the entire purpose was to get an import license for nylon, he explains. In this country, it is considered fashionable to complain about government restrictions. We took the restrictions as an opportunity. If the rules against nylon imports had not been there, I could not have made the money! The heftiest profits came during the High Unit Value scheme, which the Government introduced in 1971 through which polyester filament yarn could be imported against the export of nylon fabrics. Reliance accounted for over 60% of exports under this scheme and was therefore, its largest beneficiary. Once the rupees and dollars both began flowing in, Dhirubhai decided that his sons would have the best education that money could buy. Elder son Mukesh, who showed a technical bent of mind, did chemical engineering, subsequently went to Stanford and obtained an M.B.A. Anil, the younger of the boys by three years, specialized in chemistry and then went to Wharton to secure his masters degree in business administration. The strain of ceaselessly fighting corporate and political wars had inevitably told on Ambani, and his health hit a downward curve after 1986. That year, he had a stroke that left one side of his body partially paralyzed. The news of his indisposition spread like wildfire in the stock market, and the Reliance share fells like a stone in only a couple of hours trading. For a long time, he did not make any public appearances, and the counter continued to languish in the doldrums. The day he first appeared in public, the scrip made a smart recovery. Though not as physically hardy as before, Dhirubhai had not let the permanent handicap of the paralytic stroke blunt the edge of his razor-sharp brain. It was until his death that from his fourth floor office in Maker tower IV at Nariman point all major policy decisions, which affect the future of the
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Reliance group, were taken. The routine running of the organization was left to Mukesh and Anil, who nevertheless consulted him in all key matters.
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ONLY VIMAL
When the scheme ended in 1978, Ambani turned to the domestic market. Their only difficulty was that they were not sufficiently known or established in the domestic market. Their first priority was to establish the brand name VIMAL. They therefore launched a crash-advertising programme, which blazoned the mills message i.e. ONLY VIMAL and the baseline A woman expresses herself in many languages Vimal is one of them. In his early days, Dhirubhai found the domestic cloth market controlled by wholesalers who preferred to deal with established companies. So he decided to set up his own chain of retailing stores throughout India, using the franchising technique. For 3 years between 1977 and 1980, almost daily a new and exclusive Vimal retail outlet would open its doors to business. Today, Vimal textiles are sold through thousands of retail outlets, and easily from the industrys best-selling brand. Ambanis success in franchising and his speed in opening retail outlets are comparable to that of Benetton and McDonalds. Ambani had been dreaming of backward integration. My commitment is to produce at the cheapest price and the best quality. His desire was motivated by lack of supply of quality fabric to the export market. The result was a spanking new mill at Naroda with a capital cost of Rs.2, 80,000 that he borrowed. Reliance began manufacturing activities at Naroda in 1966, with for warp-knitting machines and a staff strength of 70.
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DHIRUBHAI AMBANI: ADEN
TO
EDEN
Indian stock markets and equity cult would not have been what they are but for Dhirubhai.
In more than 40,000 years of known human history, billions of human souls had a sojourn on this planet earth. Very few, indeed very very few of them make a difference on the way humanity will live ever after. The few such people have touched all aspects of our lives. What they do and achieve, is sometimes adored, sometimes abhorred and sometimes only argued about. But never ignored. They are the people who steadily widen the gap between human beings and other animals. Dhirubhai was one such person. His single most important and lasting contribution to this nation is not the mammoth empire he created, not the wealth he generated, not the global name for India by setting up Indias first private sector Fortune 500 company and not his individual entrepreneurial exploit, which nevertheless is legendary. But it is the change he brought about in the investing culture or the way an ordinary individual in this country invests his/ her savings. He charmed, almost like a magician, masses and retail investors into stock markets in late 70s, 80s and continued through the 90s. He changed for good, almost single handedly the shape and size of stock markets. Today, we take it for granted that there are 10 million shareholders in this country and more and more people can be equity holders effortlessly. But we are likely to miss the scenario that prevailed some two decades ago. An ordinary wage earner or a trader would not think of shares any more than he thinks of a gambling den. Stock markets and IPOs were meant only for a handful of people either very rich or having nexus to inner coterie that ruled the bourses.
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The equity cult that he triggered and unleashed, made it possible for thousands of entrepreneurs to raise equity funds, government to think of getting foreign investors, stock markets to reform and get driven by technology and so on. We cannot imagine that but for mass retail shareholder base of Reliance, what would have been popularity, participation, size and liquidity in the Indian stock market by 1991? Would it have been adequate for foreign investors to respond to reforms? His company was also the first one to raise money by way of GDRs or innovative bonds and debentures. One may ask how important is it to have capitalism and capital market for general welfare in a country beset by financial scams on one hand and religious fanaticism on the other. We just have to look into history of progress and poverty in the last half century. There are countries like USA and South East Asian countries (and in last two decades communist China) that welcomed capital with an open arm and a warm hug. They did everything that helped attracting capital. They un-did everything that could have hurdled the inflow of capital. The resultant difference is obvious to all of us. The resultant difference is growth and stagnation, infrastructure and bottlenecks, prosperity and penury, high standard of living and destitution. There is one single factor that has caused this difference. One single factor Capital. Whenever we see government, be it through its Finance or
Disinvestment ministry doing anything right, that would be welcoming capital. Whenever we see them doing anything wrong, more often than not it is blocking capital. When we travel and see the South East Asian nations and China, we can see huge infrastructure of roads, ports, airports, bridges, dams, power, telecom facilities, manufacturing setups, shopping complexes which is so strikingly ahead of that in India. If Dhirubhai and his group have done one thing wonderfully right, it is to raise capital. Raise capital in abundant quantity and at a right
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time. It sounds a little wicked. This is tragic outcome of intoxication of socialist values that we have been subjected to. One can do it repeatedly only if one rewards adequately providers of capital. To do that consistently is never an easy task. Equities or stock markets are the wheels of the capitalism chariot and which is the only vehicle to prosperity and progress. In todays global village, when one has to raise capital and be globally competitive, one has to have a global size. Most of Indians and more so our policy makers take small size as our destiny and in fact suffer from myopia as well as phobia of size. He stood out as the only man in Indian business, who had the courage to defy the thought process of all around him and had this vision that to survive in the long run, one needs to be competitive and to be competitive, one needs scale. Global scale. Is it not incredible that a man was born with this innate vision about secrets of growth and success, in a small village in Gujarat? Is it not incredible that he did it in a country where bureaucracy and government are built to thwart any enterprise or any business? Is it not incredible that the man and his company performed with perfection in licence raj as well in the last decade of reform fever? A purist can argue on ends and means, righteous approach and spiritual heights. The fact of the matter is that we owe a lot of capitalism, reform, equity cult, liberalization, India's stature as one of leading equities market in the world et al, to one man - Dhirubhai Ambani, who fought against all odds, and changed our capital markets and our lives for good. He touched our lives like no other and many entered Eden as he built his empire after returning from Aden.
Share holder was his chief deity PRE-GLOBALISATION LICENSE RAJ

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I am willing to Salaam anyone. One thing you wont find in me and that is ego
Before he could build his world size plants, he had to get hundreds of licenses. For that Ambani had to change the bureaucracys mindsets and force it to review the licensing system. According to Ambani convincing the Government meant adopting a flexible approach. The most important external environment is the Government of India. You have to sell your ideas to the Government. Selling the ideas is the most important thing and for that I will meet anybody in the Government. I am willing to Salaam anyone. One thing you wont find in me and that is ego. Ambani would spend hours educating the guardians of the license raj. Bureaucrats needed to be convinced by number and details. Ambani and his delegates never went to Delhi without this. They would gather the latest status reports on what was happening in different parts of the world in their area of interest and distribute copies of this among influential politicians and bureaucrats. We cannot change our rulers but we can at least help them learn how to rule us better, he used to tell his executives. Many attribute Dhirubhais success to political patronage rather than proficient management. Prior to 1991 New Economic Policy, Reliance was criticized for manipulating tariffs to suit its ends at the expense of its rivals. To some, he became the symbol of all that is wrong in the Indian economy. Another set of businessmen felt that Reliance was an out of control monster, a bubble that would burst at any moment. Outwardly, Ambani appeared unfazed by these allegations. Controversy is the price to be paid for success. Reliance would not have reached this level if any of the charges were true.
GROWTH IS LIFE
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Reliance at its Best Reliances most outstanding achievement has been to introduce the equity cult to every small town in India. Fanning out to tap the rural stock exchanges, he taught people who would have never have thought of investing in shares, how to buy them, to track the price movements of scrips, to deal with stock brokers and to develop the habit of reading financial dailies and stock market newsletters. An overwhelming majority of Reliance shareholders hold less than 100 shares and one in 4 Indian investors owns shares in Reliance. And since then Reliance has remained a leader in the capital markets. All its mega issues have been successful at home as well as in international markets. Investor confidence was reaffirmed in Dhirubhai when he declared a 1:1 bonus. To many the Ambanis epitomize the seedy side of business, tampering with import quotas, switching share certificates and pre-empting licenses were some of the charges. Nevertheless, Reliance has built huge capacities at internationally competitive costs and become a world leader in petrochemicals. Its performance has been defying logic. Even in a crisis-ridden market in late 1997, when the oil prices dipped to their lowest in the decade, Reliance has managed to post a profit which was up by 25 per cent from last year. Investors have been largely benefited by Reliance's ability to
customize technology. Its strength lay in the way it integrated its projects. Take the example of Reliance Textiles, which was the first Ambani company to go public after its merger with My Nylon of T.A.Pai who had once owned the Syndicate Bank. Considering the polyester content in Vimal fabrics, the choice was to manufacture polyester staple fiber (PSF) and polyester filament yarn (PFY). So in 1982 Reliance set up the PFY project at Patalganga in Maharashtra followed by PSF capacity in 1986. Next it integrated backwards in purified terephthalic acid (PTA) in 1986 and paraxylene (input
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for PTA) in 1988. It then pocketed the detergent manufacturers by putting up a plant to make linear alkyl benzene (LAB) in 1987. In 1991, the company embarked on its most treasured project, at Hazira, the largest single multi-feed ethylene cracker in the world. Hazira is a conglomeration of many world-class plants, churning out polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), PFY, PSF, polyester terephthalate (PET) and other intermediates like vinyl chloride monomer, mono ethene glycol and pure phthalic acid (PTA). The Hazira plant is the biggest chemical complex in India. While this methodology helps in the economies of scale, there are many bottlenecks such as inadequate port facilities, erratic water and power supply and high cost. To overcome these, Reliance went on to create its own facilities. It built its own jetties in Hazira and a single buoy mooring, 5 km off the coast, for large tankers to unload liquids directly into storage tanks. All Reliance plants are self-sufficient in power. In fact, the ethylene terminal at Hazira was a stunning achievement. Before the commissioning of the cracker plant Reliance imported large amounts of ethylene for its downstream PVC and PET plants. To transfer the ethylene at 138 degrees it set up a cryogenic terminal in the deep sea. An achievement Anil Ambani is proud of: "People said ethylene transfer is unsafe and not possible in India. Once we proved that we can do it safely, the world is copying it." When Reliance Petroleum was building the refinery in Jamnagar, nearly everyone thought they were over ambitious. The Ambanis had hired some foreign consultants to know whether the project was viable. The answer they got was a categorical no. But the family decided to go ahead despite the negative report. Elder son Mukesh Ambani would make it a point to jet to Jamnagar once a week after construction work started there, by his private plane. Hital Meswani, a cousin, was posted in Jamnagar and many
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who worked there say he was aware of every minute detail of the construction process. Whats more amazing is the speed at which the refinery was constructed: it took all of 36 months resulting in great cost savings. The refinery's capital cost per tonne is 30 to 50 per cent lower than that of other refineries recently set up in Asia. The unit accounts for over 25 per cent of India's refining capacity. This Rs 25,000-crore integrated Jamnagar refinery complex in Gujarat houses the world's largest greenfield project, with a capacity to refine 27 million tonne per annum of crude. In the same complex, Reliance has built the world's largest paraxylene project with a capacity of 1.4 million tonne per annum, a polypropylene project with a capacity of 6,00,000 tonne per annum, India's largest all-weather port, captive power plants and all related infrastructure. Reliance uses what is known as the 'sweat technology' whereby it engineers milk as much as possible from the plants. To enhance output of PTA at Patalganga, the team added a 30-tonne compressor for supplying more air to the reactor where paraxylene gets oxidised. But the engineers were not satisfied; only 23 tones air was being used. The team is working on how to use the remaining seven tones! Mega challenges excite and power the bosses of this petrochemical giant. The common shibboleth heard in the premises of Reliance is Dikhana hai (We have got to do it). Executives are encouraged to think laterally and view business as a series of processes. Managers are given the power to take decisions, which expands once performance is proven. The company has relentlessly sought professionals of high class, picking the best from other private companies, public sector and the multinationals. The mantra in Reliance is 'owner manager'.
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Reliance
is
also
known
for
its
financial
prudence.
"Reliance's
management, strategy and size are world class," says Sanjeev Prasad, analyst, Kotak Securities. Insiders say that the company never defaults on its payments to financial institutions. All its payments reach the institution at 2.30 p.m. sharp on the day it is required to be paid. Says a banker: "But they never send the payments earlier." Being a prompt borrower has helped Reliance raise funds with ease. In 1996-97, the company raised funds worth $614 million from the international market. Reliance is the first Asian company to issue 100-year maturity bonds in the global markets. The bond issues were part of a strategy to reduce its average cost of capital and increase the average maturity of its debt. This has helped the company bring its capital cost in line with global benchmarks. Reliance has covered most of the criteria for competitiveness, including total integration, state-of-the-art technology, low-cost feedstock and cheap funding. In fact, its cost of production is among the lowest in the world. Its capacities are so huge that once the company is totally operational it will become one of the top five companies in the world in its product category. Says Brijgopal Daga, chief general manager, Unit Trust of India: "The biggest plus point of Reliance is its size." According to him, the company has been able to beat the vagaries of the market because of the huge capacities. Its future looks bright with the government proposing to increase tariffs in the petrochemical sector to stop anti-dumping. This will help Reliance because this year, when the prices of petro products were at a 10year low, their growth came from a 300 per cent increase in volumes. "The smallest shift or turnaround in the cycle will give them tremendous growth," says Daga. But theyre some who are skeptical about this trend. Says Kotak Securities'
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Sanjeev Prasad: "We are expecting an 11 per cent growth in the petrochemical sector so Reliance may not be able to sustain this profit for next year". But some Reliance officials feel that even if the global petrochemical prices fall by 10-15 per cent, the high-value addition at Hazira will insulate Reliance from such shocks. While other corporates were involved in cutting capacities last year, Reliance was busy adding capacities. "We believe in creating preemptive capacities," says Anil Ambani, managing director. Reliance forecasts the demand for its products to grow at 15 per cent in the coming years. Reliance's efforts are fully focused on the domestic market. Almost 97 per cent of its turnover comes from sales in the domestic market. "There is no reason for them to sell outside when they have such a good demand in India," says Tekchandani. Adds UTI's Daga: "Whatever little they could be losing out in exports, they make good through transactions like picking up money through GDRs." In the money market the only time it slipped up was when it decided to convert the triple-option convertible debentures issued in 1993 into equities, instead of paying the investors. That was when work on its Jamnagar plant started. This move made analysts a bit wary for two reasons: one, it bloated the company's equity and two, a cash-shortage was perceived. In 1995, the petrochemical oil and textile manufacturer was Indias biggest non-government company by almost every yardstick including sales, profits, net worth and asset base. Its market capitalization that year was Rs.96 billion. The previous year it was the only India entrant in Business Weeks list of the 50 largest companies headquartered in developing countries. Today, the company is a multi-division behemoth, employing more than 50,000 people at its major manufacturing centers in Naroda and Patalganga, and using machinery that is among the most advanced in the world. The
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secret of Reliance is its quick project implementation and a strong balance sheet. And you can rely on that.
RELIANCE INFOCOMM
Reliance Infocomm (RIC) is India's largest mobile service provider with over 7 million customers. Reliance Infocomm has established a pan-India, high-capacity, integrated (wireless and wireline) and convergent (voice, data and video) digital network, to offer services spanning the entire Infocomm value chain - infrastructure, services for enterprises and individuals, applications and consulting. Reliance Infocomm has licenses to offer telecom services in 20 circles under the Unified Access license. In addition, it has received the Letter of Intent for the J&K circle. This has enabled RIC to offer services across the length and breadth of India's vast geography through its next generation fibre optic network backbone spanning 60,000 route kms. RIC is currently offering its wireless services in 1,100 towns and cities across India.
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TEACHER
IN THE FORM
OF DHIRUBHAI AMBANI
What they dont teach at Harvard ?????? The following lessons can be learnt from the life and works of Dhirubhai Ambani Zeal, determination and enthusiasm: He was the one who taught the world to dream big. He knew that although he was born in a poor family he would live a life of a rich man. He had the zeal and enthusiasm to come up in life. The following quotes support this point:
"Meeting the deadlines is not good enough, beating the deadlines is my expectation." -----"If you work with determination and with perfection, success will follow." -----"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."
----- Think big: He was one of those very few Indians who really thought big. He always had a dream of magnum opus. He wanted to give the customers the best and always thought that continuos innovation was a must to survive and grow. His plants are world scale with latest technology. Often friends used to ask him ,how has he achieved all that he wanted?. His reply was , No. there are many miles to go.
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"Think big, think fast, think ahead. Ideas are no one's monopoly"
Never give up attitude: He never gave up despite many failures. He knew that failures are a part and parcel of life. He never took failures as hurdles but took them as opportunities. He worked towards his goals and never gave up. He often snatched victory from the jaws of defeat.
"Don't give up, courage is my conviction."
He had a nose for opportunities:
He smelled opportunities that no other businessmen could. He attributes his success to his uncanny knack of identifying opportunities. Competitors were jealous by his success and felt that he was a transgressor. But he had a smart answer to his critics I identifies the opportunities, you all didnt.
"Pursue your goals even in the face of difficulties, and convert adversities into opportunities."
Common touch, uncommon vision: He was the person behind the multi million group of Reliance. Without his vision and his leadership skills the Reliance group would have been nowhere near what it is now. He was a trailblazer and a troubleshooter. He knew that only a great vision would take him forward.
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"Growth has no limit at Reliance. I keep revising my vision. Only when you dream it you can do it."
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35

Motivator and facilitator: He was a great motivator and facilitator. He had that ability to identify right people for the right job. He felt that all the human beings are capable of doing a good job provided they are motivated and are given the right environment.
"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."
-------
"We bet on people."

Financial Prudence: Dhirubhai, one could say, has virtually the Midas touch when it comes to making money. Even in a sports sponsorship deal, where a company usually only gains unquantifiable publicity, Reliance made a quantifiable cash profit. In 1987, the company sponsored the World Cup cricket competition; and thanks to some savvy marketing techniques, not only got free worldwide publicity, but also made a profit in the manner made famous by the organizers of the 1984 Los Angeles Olympics. The equity cult that he created in 1979,1980,1981 and 1982 are also the examples of his mastermind. Employees Reliance on Dhirubhai: Apart from being a financial wizard, Dhirubhai was a truly magnificent organizer, and has been able to give his employees the impression that they
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can unequivocally count on him in times of distress. For example, when an unexpected flood hit the industrial township of Patalganga, and washed out three entire villages on Black Monday, 24th July 1989, the human factor in the Reliance complex there was the least badly affected, through the factory itself was totally submerged. More than twenty inches of rain fell in just eight hours in an area that had no flood history in the previous 80 years. The downpour was accompanied by winds rising to more than 80 kilometers per hour. Out of 384 people dead and 264 missing, not a single person was a Reliance employee. As many as 1,500 families were rendered homeless, and 1,15,000 people rendered destitute, but none of these were Reliance personnel. In space of 72 hours, Reliance bosses had mobilized more than 6,000 personnel from India and abroad to salvage the complex in which the company had invested more than Rs. 1,500 crores. Accommodation for affected employees was organized overnight. In spite of an ongoing transport strike, trucks and tempos were commissioned to remove 6,000 tonnes of debris within three days. The first two plants of the complex were restarted in just 14 days from the date of the disaster, and the entire complex was back on stream in a record time of 21 days. Trusting: Why do the investors in his companies respond so wholeheartedly to Dhirubhai Ambani? One of the reasons is that, all through his career, he has employed one principle that he picked up at A. Besse in Aden liberally rewarding those who have come to his assistance in times of need. Enormously large-hearted with those he considers his benefactors during his days of struggle, he has been known to dole out massive sums of money across the table without expectation of its being return. "Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth"
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Ate, slept and drank only Reliance: Dhirubhais commitment was to produce at the cheapest price and the best quality. He did not give attention to anything except Reliance. He was not a director in other companies, nor did he participate in any associations. His whole thinking, one hundred percent of his time, from morning till evening was about how to do better and better in Reliance.
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TRANSITION
FORM
DHIRUBHAI TO MUKESH AND ANIL
The visionary that he was, it was only natural that Dhirubhai Ambani planned out the succession in his group companies well in advance. His two sons, Mukesh and Anil, have been working with the senior Ambani for almost a decade, and both have been in decision-making positions for a long time. Older son Mukesh is currently designated chairman of Reliance Industries while younger son Anil is the vice-chairman. Mukesh is also the chairman of the groups latest acquisition, Indian Petrochemicals Corporation Ltd. (IPCL).
The succession has gone in accordance with the expectations of the industry observers. Industry observers expected Mukesh to slip into the shoes of the group chairman, while Anil was widely expected to play the role of the chief executive. Observers tracking the company from Dhirubhais heydays said the father had always banked upon Mukesh to be the visionary of the family, while Anil, who, with his flamboyant ways effortlessly became the public face of the group, has emerged as the nuts-and-bolts man. In addition, the Meswani scions (Dhirubhais sister Trilochanaben is married into the Meswani family), Nikhil and Hital, cousins of the Ambanis, are also directors on the boards of the main group companies. The two Meswanis, have played a considerable role in the growth of the Reliance group. The two families are known to be very close and live in the same residence in south Mumbai.
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Trilochanabens husband, the late Lallubhai Meswani, was Dhirubhais closest aide in his earlier years. The two brothers understand each others strengths. They have, in fact, taken turns to bring their own expertise at different times in the companys history, a top RIL executive told in an interview to Business Standard after Dhirubhais death on the condition of anonymity. They are a seamless combination, the executive said, adding, each brother is perfectly capable of completing a sentence started by the other. Asked specifically if Anil was being groomed to handle the groups core oil & gas business whereas Mukesh would be in charge of the new economy initiatives, this RIL executive said, It is just a misconception that Anil is not involved in telecom and other new economy businesses. It is true that Mukesh is more hands-on in the telecom project, but Anil is equally involved. And, when the senior Ambani was not around (in routine meetings), Mukesh still has the last word on the groups oil and gas issues. Mukesh is the quiet type. As you would have seen, he didnt even come out once inside the Breach Candy Hospital (during the period Dhirubhai was admitted). But that doesnt mean he is out of the loop on anything. People have started suspecting a rift between the brothers as Mukesh is concentrating on rolling out the groups infocom project, this executive said. Industry observers, reflecting on Dhirubhais working style, said there was definitely a pattern in the way the group had inducted some high-flying professionals in recent years. These include K G Ramanathan, former chairman and managing director of IPCL, who now heads Reliance Power; B D Khurana, formerly of the Bharti group, who is now vice-chairman of Reliance Infocom, Alok Agarwal, formerly of Bank of America, who has been the group treasurer for some time now, and Firuza Parikh, who heads the biotech initiative.
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ANIL V/S MUKESH

Who is better? Anil Ambani, 45years He is the marketer. Mukesh Ambani, 47ears. He is the manager This Stanford graduate started as Dhirubhais troubleshooter as after graduation he came to India to manage He Reliance care and was a the helping hand to Dhirubhai. took about Patalganga, Hazira and Jamnagar plants expansion. He has easily shoes been fitted into his has to fathers and chosen at Reliance was in are by
He is like the PRO of Reliance. He has been a public figure in the recent group. years He for the Reliance addresses often
shareholder meetings and is the one who faces media. He is an extrovert. This Wharton graduate started his career and managing the textile business at Naroda largely bringing marketing, media instrumental His key skills and
unequivocally
replace his father. He is now the mentor of the group Ambani family. and the
professionalism into Reliance. financial management, networking globally savvy management.
Both have their own qualities and it is hard to generalise that one brother is better than another. In future what is going to matter for Reliance is that both the brothers should put their skills to work and create a synergy that is useful for both Reliance as a company and the two brothers. The two brothers understand each others strengths. They have, in fact, taken turns to bring their own expertise at different times in the
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41

companys history, each brother is perfectly capable of completing a sentence started by the other. - Top executive at Reliance
Mukesh Ambani and his younger brother Anil (left), Chairman and ViceChairman of Reliance Group of Industries, are the richest Indians according to a Business Standard survey. The net worth of the Ambani brothers stand at a whopping Rs 23,588 crore ($5.18 billion), up by a massive Rs 4,724 crore ($1.03 billion) since the last year. Most of these gains have come from the 25.4 per cent rise in the Reliance Industries stock price.
Anil and Mukesh Ambani
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ANIL + MUKESH = SUCCESS

THE BIG QUESTION - WILL
BROTHERS
IN THERE BE A
SPLIT
BETWEEN
AMBANI
FUTURE?
New challenges await the group. There is the telecom venture to bring to fruition, even as the valuation of telecom as a business has changed for the worse. There are the diversifications into relatively uncharted waters, like the life sciences. There are new ventures to grow, like insurance. And there are questions to be answered on whether the group will continue at the same frenetic pace, or get more sedate. If the Ambani sons track record is anything to go by, expect more rather than less. The biggest question that is making the rounds is that will the Ambani brothers split? No says Mukesh Ambani just after becoming the Chairman of the group. He claims that Anil is like a son to him and that he would never use his veto power. He has scotched the speculation that the two brothers might split. He also added 500% the brothers will stay together. On being asked what would be the equation with his brother? he said, I will assume the role of a father. We have to stick together. We are not a normal business family. The things like split happen when there is no growth. We have grown from 65 crore to 65000 crore. We have so many opportunities that we have no time. Our ambition is limited only by time. He claims that his brother has one of the finest business minds in the country. There is also a speculation that the responsibility will be divided between the two brothers to which he replies, those who ask such things are ignorant of
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how companies work. This not pan ka dukan where I sit in the morning and he sits in the afternoon.
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NEW AGE COMPANIES

The Reliance spread This year in March RIL and RPL merged to form Indias largest private company in terms of sales.The company is now beginning to bank on new age companies. The short profile of each of reliances new age companies is given: Financial services: RIL holds 47% in Reliance Capital, an NBFC with a net worth of Rs. 2000 crore. RCL is involved in project financing, corporate and institutional lending, asset management, stock broking, stock lending and depository services. The Non-Banking Financial Services (NBFC) industry in the private sector in India is represented by a mix of a few large companies with nationwide presence, and a large number of small and medium sized companies with regional focus. These NBFCs provide a variety of services including fund based, and fee based activities, as well as cater to retail and non-retail markets, and niche segments. The financial sector through the last decade has undergone wide volatility and change. During this period, effective regulations have brought in wide ranging changes on prudential norms and continuous monitoring mechanism, thereby improving overall industry environment. The NBFCs with high credibility, efficiency, and customer-oriented services will dominate the sector in future.
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Business Review: RCL continued to focus on the infrastructure projects providing immense growth opportunities and substantial tax benefits. Leasing: The Company's activity in the leasing business stood at Rs. 22 crores. Investments in the Infrastructure Sector: RCL's investment in infrastructure sector included high growth areas of power, telecommunications, ports etc., contributing to the overall economic development. Your company's investment in infrastructure projects stood at Rs. 1,238 crores. Insurance: During the year, RCL has taken a new strategic initiative by entering into the life insurance and general insurance business. The company's investments in the insurance sector stood at Rs.78 crores, and upon receipt of approval from the Reserve Bank of India, RCL intends to invest further in this sector.
Energy:
Reliance Energy is India's leading private sector utility group, with aggregate estimated group revenues of Rs. 7,700 crore (US$ 1.8 billion), and total assets of Rs. 9,800 crore (US$ 2.2 billion).The group distributes nearly 16,000 million units of power to over 5 million consumers in Mumbai, Delhi, Orissa and Goa, across an area covering 1,24,300 sq. kms. Reliance Energy generates 941 MW of power, through its power plants located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa. Reliance Energy is ranked amongst India's top 20 listed private companies in terms of all major financial parameters, including assets, sales, profits and market capitalisation. Reliance Energy is India's most valuable power
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company with market capitalisation of Rs. 13,400 crore (US$ 3 billion) as of March 31, 2004.
Reliance Infocomm :
Reliance Infocomm (RIC) is India's largest mobile service provider with over 7 million customers. Reliance Infocomm has established a pan-India, highcapacity, integrated (wireless and wireline) and convergent (voice, data and video) digital network, to offer services spanning the entire Infocomm value chain - infrastructure, services for enterprises and individuals, applications and consulting. Reliance Infocomm has licenses to offer telecom services in 20 circles under the Unified Access license. In addition, it has received the Letter of Intent for the J&K circle. This has enabled RIC to offer services across the length and breadth of India's vast geography through its next generation fibre optic network backbone spanning 60,000 route kms. RIC is currently offering its wireless services in 1,100 towns and cities across India. RIC offers high-speed mobile data services though its R-World mobile portal. This portal leverages the high-speed data capability of the next generation CDMA 1X network. It provides 70 applications such as news, astrology, T.V. guides, movie clips etc. and 35 games and logs more than 1 billion hits a month. Oil and Gas: JVs produce crude oil and natural gas in Panna, Mukta and Tapti fields. Awarded 12 new exploration blocks. Bidding for more.
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47
Petrochemicals: A world major major in polyester fibre and polyester filament yarn. In June 2002, Reliance bought a controlling stake in IPCL.
Reliance Petroleum :
RPL is the worlds largest grassroot refinery with a capacity of 27 million tonnes. It has stake in Petronet India Ltd, set up for the creation of pipelines all over India. Will hold 26% in the central India pipeline project which is a 1615 km. pipeline. IPCL Indian Petrochemicals Corporation Limited (IPCL) is a new entrant to Reliance family, India's fastest growing and most admired private sector group founded by a visionary entrepreneur late Mr. Dhirubhai H. Ambani. Reliance has acquired additional 20% of equity shares from public through public offer and now holds 46% of company's equity shares. The new board has six members nominated by Reliance, two nominated by Government of India and four independent members. Indian Petrochemicals Corporation Limited (IPCL) is the pioneering
petrochemical company in India. It was established on March 22, 1969 (Chitra, Shukla Paksh 4, Saka 1891). Today, IPCL is one of the leading petrochemical companies. It's business comprises of polymers, synthetic fiber, fiber intermediates, solvents, surfactants, industrial chemicals,
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catalysts and adsorbents. Backed by Research Center, Product Application Centers, Technology Management Centers and Customer Relations Centres the company is continuously innovating its processes and products. The company owns and operates three petrochemical complexes, a naphtha based complex at Vadodara and gas based complexes at Nagothane near Mumbai and at Dahej on Narmada estuary in bay of Khambhat. The company produces over one and half million tonnes of merchant products and has turnover close to US $ three billion.
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PERCEPTIONS
ABOUT
RELIANCE
AND THE
GREAT
MAN
The companies and their people dont become great only by their profit making skills and their bottom lines. They become great when they do something more than just making profits and enhancing bottom lines. Dhirubhai Ambani and his company is the epitome of such people and company. He has touched the lives of millions of shareholders, has provided employment to thousands of Indians, has been involved in controversies with people at Delhi and last but not the least has inspired Indians to think big and grow in life. At the time of his death everyone was touched. He died a great death. To know what people think about him I have incorporated perceptions of the students and the leading corporates of India.
CORPORATE PRCEPTION
GITA PIRAMAL The man who captured investors' imagination What makes Dhirubhai Ambani so special? Money? Yes, he was rich, but there are people richer than him. Power? Yes, he was powerful, but there are people more powerful. When he decided to speak, crowds gather to hear him though he was no orator like Atal Bihari Vajpayee. So what makes this boynext-door turned billionaire so special? Why does he capture our imagination in a way no one else has in the past half century? It is a simple answer. His is an amazing rags-to-riches story, the stuff legends are made of. Most people are familiar with the tale but what is interesting is his mindset. Ability and doggedness combined to turn fantasy into reality. He founded a brash company which challenged the established groups and their way of conducting business.
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B.K.BIRLA:
Dhirubhai Ambani had an ambitious plan of converting the deserts of Rajasthan very fertile. This was one of the dream project plans he narrated to me two years ago in great detail when my wife and I called upon him at his Mumbai residence. When I asked him about his future plans, he gave me a half-an-hour lecture on how sea water could be used to generate steam and then after use conveyed to Rajasthan through a pipeline to make it a fertile land. Considering his outstanding ability of enterprise, I am sure that, given a chance, he would have transformed his dream into reality. I rate him one of the most outstanding industrialists of the nation, for his ability to complete projects within time as well as cost schedules. His credit was praiseworthy, especially because he was probably the first one to install world-class factories and plants within a predetermined timeframe. We all prayed for his expeditious recovery but knew recovery would be difficult. My eyes filled with tears and my heart sank at the thought that on my next visit to Mumbai I may not have a friend to visit. It has been a great loss.
STUDENT PERCEPTION
Mr. Naren Lath. T.Y.BMS, Raheja College The late Mr. Dhirubhai Ambani was a man with a dream and a vision. Starting from scratch and building a Rs. 70,000 crore company is no mean achievement. He showed all Indians, how to go about their work with zeal, enthusiasm and single-mindedness. And Im sure there must be hundreds of Indians who must have set out to start their own ventures, modelling themselves on Dhirubhai. But how many of them succeeded? Scores of people talk about how Dhirubhai manipulated the license-andpermit raj and maybe, worked unethically, but all this notwithstanding, there
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can be none denying the fact that he became a darling of the stock markets and the millions of investors who held Reliance stocks and gained hugely from the same. The most important lesson Indians in general and students in particular have to learn from him is the never-say-die attitude. As one of Indian industrys most capable sons, Dhirubhais life, should be included as a part of the syllabus of business schools. I have no doubts regarding the capability of his two sons, and am sure they will take the company from strength to strength. P.S.: And he must be smiling up there in the heavens as his sons have struck gas! Mr. Manish Chopra, TYBMS, Raheja College Dhirubhai Ambani was synonymous with Reliance in exactly the same manner as JRD with Tata and Rahul Bajaj with BAL. He was a colossus who excelled in everything he did. Reliance has grown into a veritable empire under his stewardship. From the early days of 1977 to becoming Indias only private sector Fortune 500 company Reliance has certainly come a long way. Such blistering growth benefited all shareholders. Reliance is certainly the company to be relied upon. Long live Reliance, Long live Dhirubhai.
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PERFORMANCE REVIEW
1. Oil and Gas Sector
India is an energy-starved country and imports a staggering Rs 65,000 crores worth of crude oil every year, which is about two thirds of its annual requirement. To realise Shri Dhirubhai Ambani's dream, Reliance, like in its other businesses, created from scratch a winning combination of people, processes, systems and technology to create a world-class exploration and production company. Reliance started its exploration programme straightway in deep water and drilled its very first well at a depth of more than 2,100 feet, the first ever for a new exploration and production company. Reliance is now drilling in water depths of about 6,000 feet, which is the deepest ever so far accomplished in India.Reliance has discovered natural gas in the very first well it drilled in the deep-water block D6 in Krishna Godavari basin off Andhra Pradesh coast. This success comes in an aggressive schedule of 20 months from the receipt of exploration licence. This is the first ever discovery by an Indian private sector company. In his memory, they will be named as Dhirubhai 1, 2 and 3.This oil and gas initiative will lead to a new avenue for value creation for shareholders. It will open enormous opportunities for economic growth and development in India.
Operating Performance Reliance performed resiliently in an environment characterized by constraints on global economic growth, demand-supply imbalances in virtually every sector and volatility in energy, petrochemical feedstock and product markets. This performance was achieved on the strength of global competitiveness of Reliance's operations, leadership in domestic markets and healthy presence in export markets.
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2.
Export Performance
Reliance qualified to be reckoned as India's largest exporter. During the year Reliance exported its products to about 100 countries. New offices were opened in Shanghai, Ho Chi Min City, Jakarta, Jebel Ali and Istanbul. In recognition of the company's outstanding achievement in exports, Reliance was granted the 'Golden Super Star Trading House' status by the Directorate General of Foreign Trade, Government of India. 3. Corporate Governance
For Reliance, Corporate Governance revolves around earning the trust of all constituencies in how Reliance conducts its business. This translates into attaining the highest levels of transparency, accountability and equity, in all facets of operations, and in all interactions with stakeholders, including shareholders, employees, government and lenders. Reliance recognises communication as a key element in the effective functioning of the overall corporate governance framework, and emphasises continuous, efficient and relevant communication with all its external constituencies 4. Social Capital
Reliance believes that building social capital is as important as building financial capital. Reliance has placed education and health at the core of its socially oriented initiatives. In this perspective, Reliance has supported the creation and management of several institutions in school education, higher education in science and technology and tertiary health care.
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CONCLUSION
Reliance has grown at a dramatic pace. This achievement is not accidental. It has been possible because of Reliance's ability to anticipate the nature and direction of opportunities in the market place.But it is not enough to see an opportunity. It is also necessary to leverage them. The Reliance leadership has been able to shape businesses to harness those opportunities in the interest of the company and its shareholders. Globalisation, new technologies and changing demography are inexorably and continuously changing the face and frontiers of opportunities. Unprecedented advances in information, communication and other technologies are transforming corporate structures and business models. Reliance has demonstrated an unmatched ability to keep in step with these dramatic advances. This has enabled Reliance to always remain one step ahead of times. In the process, Reliance has raised the threshold of India's advancement. Reliance is presently building on these strengths. It is shaping a future that seeks to attain global leadership. This objective will be achieved not be waiting for something providential to happen. It will be realised on the strength of the company's capacity, competitiveness and competency. Reliance is fortifying the depth and width of the value chain. They are infusing operational and strategic flexibility. They are diversifying market presence. And above all, they are getting close to the final consumer. These elements are seminal to the Reliance architecture and will enable the company to carve out a leadership position globally. As a result of all this, Reliance aspires to contribute significantly to realising the dream of transforming India into a major economic power in the 21st century.
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Dhirubhai regarded himself as a Trustee acting on shareholders behalf. To create value for shareholders was his religion. To give them the best return was the mission of his life. Today, His vision is everlasting. His values are eternal. His principles are fundamental. May God bless Reliance to achieve the unachievable?
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BIBLIOGRAPHY
Business Maharajas by Gita Piramal Economic Times Times of India Business Standard India Today Business World
www.indiainfoline.com www.ril.com
Business Barons
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Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

WHY ONLY DHIRUBHAI?

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

RELIANCE - MAJOR MILESTONES

1994 Offered the second Euro issue of GDR

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Reliance Refinery Emerges World Leader in Energy Performance

private sector for the Year 2003-04 dollar over 1 billion

Telecoms in 2004 Reliance Industries ranks No.2 in 'India's Most Respected

Great Indian Business Legacy -- Reliance

RELIANCE: - DOES INDIA THE

India's No. 1 Business Group

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

RIL alone accounts for:

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

AMBANIS FAMILY TREE

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

DHIRUBHAI AMBANI: ADEN

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Share holder was his chief deity PRE-GLOBALISATION LICENSE RAJ

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

"Don't give up, courage is my conviction."

He had a nose for opportunities:

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

"We bet on people."

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

DHIRUBHAI TO MUKESH AND ANIL

Great Indian Business Legacy -- Reliance

Great Indian Business Legacy -- Reliance

ANIL V/S MUKESH

professionalism into Reliance. financial management, networking globally savvy management.

Great Indian Business Legacy -- Reliance

Anil and Mukesh Ambani

Great Indian Business Legacy -- Reliance

ANIL + MUKESH = SUCCESS

Great Indian Business Legacy -- Reliance