dhirubhai ambani

Born December 28, 1932
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.

Dhirubhai was born at Chorwad, in the district of Junagarh in the western Indian state of Gujarat. Chorwad was then, as it is now, a small village about midway between the historic fort of Diu to the south and the fishing port of Porbandar to the north. Porbandar is the birthplace of Mahatma Gandhi. (Incidentally, the Gandhis and the Ambanis come from the same stock or gotra, the trading community of Modh baniyas.).Dhirubhais father, Hirachand Govardhandas Ambani, earned little as the village schoolteacher. He was, however, a man of simple habits and lived a measured life. Dhirubhais mother, Jamanaben, was a thrifty woman and knew how to stretch every paisa a long way. Long years of hardship had taught her to handle with great care whatever little money Hirabhai gave her every month on the pay day.But even her thrifty ways often failed to pull her growing family through the month. On such occasions she had to borrow small amounts of money from neighbours. She did not hide such day to day stark realities from her children, for she did not want to give them a false start in life.

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.

Dhirubhai Ambani was born on 28 December1932 at Kukaswada near Chorwad, Jamnagar (now the state of Gujarat, India) to Hirachand Gordhandhas Ambani and Jamnaben in a Modh family of modest means(Incidentally,The Gandhis and Ambanis came from the same gothra,the trading community of Modh baniyas). Hirachand Govardhandhas Ambani earned little as a village school teacher.But his wife,Jamanaben knew how to stretch every paisa in a long way.Hirachand and Jamanaben had two daughters Trilochanaben and Jasuben and three sons Ramnikbhai,Dhirubhai and Natubhai.Dhirubhai was extremely demanding,robust of health and difficult to placate from his very babyhood days.As a boy,he possessed immense gusto and enormous energy and was determined to do what he wanted to do in exactly the way he wanted it done.

When he was 16 years old, he moved to Aden, Yemen. He worked with A. Besse & Co. for a salary of Rs.300. Two years later, A. Besse & Co. became the distributors for Shell products, and Dhirubhai was promoted to Dhirubhai was precocious and highly intelligent and also as highly impatient of the oppressive grinding mill of the school classroom.He chose works which uses his physical ability to the maximum rather than mugging up school lessons. When Jamnaben once asked Dhirubhai and Ramnikbhai to help his father by earning money,He angrily replied Why do you keep screaming for money? I will make heaps of money one day.During weekends,he began setting up onionpotato fries stall at village fairs and made extra money which he gave to his mother.C21manage the company s filling station at the port of Aden.He was married to Kokilaben and had 2 sons, Mukesh,Anil and two daughters, Nina Kothari,Deepti Salgaocar.

Dhirubhai Ambani eventually returned to India and started Majin in partnership with Champaklal Damani, his second cousin, who used to be with him in Aden, Yemen. Majin was to import polyester yarn and export spices. The first office of the Reliance Commercial Corporation was set up at the Narsinatha Street in Masjid Bunder. It was 350 sq ft (33 m2). room with a telephone, one table and three chairs. Initially, they had two assistants to help them with their business. In 1965, Champaklal Damani and Dhirubhai Ambani ended their partnership and Dhirubhai started on his own. It is believed that both had different temperaments and a different take on how to conduct business. While Mr. Damani was a cautious trader and did not believe in building yarn inventories, Dhirubhai was a known risk taker and he believed in building inventories, anticipating a price rise, and making profits.In 1968, he moved to an upmarket apartment at Altamount Road in South Mumbai. Ambanis net worth was estimated at about Rs.10 lakh by late 1970s.

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.

Sensing a good opportunity in the textile business, Dhirubhai started his first textile mill at Naroda, in Ahmedabad in the year 1977. Textiles were manufactured using polyester fibre yarn. Dhirubhai started the brand Vimal, which was named after his elder brother Ramaniklal Ambanis son, Vimal Ambani. Extensive marketing of the brand Vimal in the interiors of India made it a household name. Franchise retail outlets were started and they used to sell only Vimal brand of textiles. In the year 1975, a Technical team from the World Bank visited the Reliance Textiles Manufacturing unit. This unit has the rare distinction of being certified as excellent even by developed country standards during that period.

Dhirubhai Ambani is credited with starting the equity cult in India. More than 58,000 investors from various parts of India subscribed to Reliances IPO in 1977. Dhirubhai was able to convince large number of small investors from rural Gujarat that being shareholders of his company would be profitable.Reliance Industries was the first private sector company whose Annual General Meetings were held in stadiums. In 1986, The Annual General Meeting of Reliance Industries was held in Cross Maidan, Mumbai and was attended by more than 350,000 shareholders and the Reliance family.Dhirubhai managed to convince a large number of first time retail investors to invest in Reliance.Ambanis net worth was estimated at about Rs.1 billion by early 1980s.

In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures. It was rumored that company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, a bear cartel which was a group of stock brokers from Calcutta started to short sell the shares of Reliance. To counter this, a group of stock brokers till recently referred to as Friends of Reliance started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange.

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.

Over time, Dhirubhai diversified his business with the core specialisation being in petrochemicals and additional interests in telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics. The company as a whole was described by the BBC as a business empire with an estimated annual turnover of $12bn, and an 85,000 strong workforce.

He has been accused of acting unethically, having manipulated government policies to suit his own needs, and has been known to be a king maker in government elections. Although most media sources tend to speak out about business politics nexus, the Ambani house has always enjoyed more protection and shelter from the media storms that sweep across the country.