Died July 6, 2002
Achievements Dhiru Bhai Ambani built Indias largest private sector company. Created an equity cult in the Indian capital market. Reliance is the first Indian company to feature in Forbes 500 list
Dhirubhai Ambani was the most enterprising Indian entrepreneur. His life journey is reminiscent of the rags to riches story. He is remembered as the one who rewrote Indian corporate history and built a truly global corporate group.
Dhirubhai Ambani alias Dhirajlal Hirachand Ambani was born on December 28, 1932, at Chorwad, Gujarat, into a Modh family. His father was a school teacher. Dhirubhai Ambani started his entrepreneurial career by selling bhajias to pilgrims in Mount Girnar over the weekends.
After doing his matriculation at the age of 16, Dhirubhai moved to Aden, Yemen. He worked there as a gas station attendant, and as a clerk in an oil company. He returned to India in 1958 with Rs 50,000 and set up a textile trading company.
Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built Indias largest private sector company, Reliance India Limited, from a scratch. 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.Dhirubhai Ambani is credited with shaping Indias equity culture, attracting millions of retail investors in a market till then dominated by financial institutions. Dhirubhai revolutionised capital markets. From nothing, he generated billions of rupees in wealth for those who put their trust in his companies. His efforts helped create an equity cult in the Indian capital market. With innovative instruments like the convertible debenture, Reliance quickly became a favorite of the stock market in the 1980s.
In 1992, Reliance became the first Indian company to raise money in global markets, its high credit taking in international markets limited only by Indias sovereign rating. Reliance also became the first Indian company to feature in Forbes 500 list.C8.Dhirubhai Ambani was named the Indian Entrepreneur of the 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.Dhirubhai Ambani died on July 6, 2002, at Mumbai.Dhirajlal Hirachand Ambani, also known as Dhirubhai, 28 December1932, 6 July2002, was a Indianrags to riches business tycoon who founded Reliance Industries in Mumbai with his cousin. Ambani took his company (Reliance) public in 1977, and by 2007 the combined fortune of the family (sons Anil and Mukesh) was 60 billion dollars, making the Ambanis the richest family in the world.
Overall, Hirachandbhai and Jamanaben lived a life of impoverished dignity with their two daughters and three sons Trilochanaben, Ramnikbhai, Jasuben, Dhirubhai and Natubhai. (The Gujaratis customarily add ben or sister to all female names and bhai or brother to all male names.). Dhirubhai was the favourite child of both Hirachandbhai and Jamanaben despite his being an enfant terrible.He was from his very babyhood days extremely demanding, robust of health and difficult to placate. As he grew up to boyhood, he became even more vigorous, unyielding and irrepressible. He possessed immense gusto and enormous energy and was always determined to do what he wanted to do in exactly the way he wanted it done, come hell or high water, as the phrase goes. But Hirachandbhai was a fond father and seldom, if ever, spoke harshly to his children, especially to his favourite one.Dhirubhai was precocious and highly intelligent and also as highly impatient of the oppressive grinding mill of the school classroom. Formal education was not his forte, he realized very early in life. He was essentially an outdoors boy. When asked to chose a task at home, at school or at the boys hostel, he always chose the most strenuous task that called for immense physical energy and stamina. Not that he was poor in doing his school lessons but just that he did not enjoy all the mugging up and learning by rote which school education required those days.As his elder brother Ramnikbhai and he grew into boyhood, Jamanaben began exhorting them to help supplement their fathers meager income. Begin earning some money, she nagged them. That angered Dhirubhai. Phadia, phadia su karo chho, he snapped at her, paisa no to dhanglo karees. (Why do you keep screaming for money? Ill make heaps of money one day.). Just to show that that was not an empty boast, he once procured a tin of groundnut oil on credit from a local whole seller and sold the oil in retail sitting on the roadside, earning a profit of a few rupees that he gave to his mother. Next, he began setting up bhajia or onion and potato fries stalls at village fairs during weekends when his school was closed.
Asia Times quotes His people skills were legendary. A former secretary reveals He was very helpful. He followed an open door policy. Employees could walk into his cabin and discuss their problems with him. The chairman had a special way of dealing with different groups of people, be they employees, shareholders, journalists or government officials. Ambanis competitors allege that he bought off officials and had legislation re written to suit him. They recall his earlier days and how he picked up the art of profiteering from the then Byzantine system of controls of Indian officialdom. He exported spices, often at a loss, and used replenishment licenses to import rayon. Later, when rayon started to be manufactured in India, he exported rayon, again at a loss, and imported nylon. Ambani was always a step ahead of the competitors. With the imported items being heavily in demand, his profit margins were rarely under 300 percent.
The Bear Cartel was acting on the belief that the Bulls would be short of cash to complete the transactions and would be ready for settlement under the Badla trading system operative in the Bombay Stock Exchange. The bulls kept on buying and a price of Rs. 152 per share was maintained till the day of settlement. On the day of settlement, the Bear Cartel was taken aback when the Bulls demanded a physical delivery of shares. To complete the transaction, the much needed cash was provided to the stock brokers who had bought shares of Reliance, by none other than Dhirubhai Ambani. In the case of non settlement, the Bulls demanded an Unbadla (a penalty sum) of Rs. 35 per share. With this, the demand increased and the shares of Reliance shot above 180 rupees in minutes. The settlement caused an enormous uproar in the market and Dhirubhai Ambani was the unquestioned king of the stock markets. He proved to his detractors just how dangerous it was to play with Reliance.
To find a solution to this situation, the Bombay Stock Exchange was closed for three business days. Authorities from the Bombay Stock Exchange(BSE) intervened in the matter and brought down the Unbadla rate to Rs. 2 with a stipulation that the Bear Cartel had to deliver the shares within the next few days. The Bear Cartel bought shares of Reliance from the market at higher price levels and it was also learnt that Dhirubhai Ambani himself supplied those shares to the Bear Cartel and earned a healthy profit out of The Bear Cartels adventure.
After this incident, many questions were raised by his detractors and the press. Not many people were able to understand as to how a yarn trader till a few years ago was able to get in such a huge amount of cash flow during a crisis period. The answer to this was provided by the then finance minister, Pranab Mukherjee in the parliament. He informed the house that a Non Resident Indian had invested up to Rs. 22 Crore in Reliance during 1982 83. These investments were routed through many companies like Crocodile, Lota and Fiasco. These companies were primarily registered in Isle of Man. The interesting factor was that all the promoters or owners of these companies had a common surname Shah. An investigation by the Reserve Bank of India in the incident did not find any unethical or illegal acts or transactions committed by Reliance or its promoters.
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