DHIRU BHAI AMBANI Group Presentation

8/8/2019 DHIRU BHAI AMBANI Group Presentation

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DHIRU BHAI AMBANI


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Earlylife

Dhirajlal Hirachand Ambani was born on 28December 1932 , at Chorwad, Junagadh inthestate ofGujarat , India , into a Modh family ofvery moderate means. Hewasthethirdson ofaschoolteacher. When hewas 16 years old, hemovedto Aden ,Yemen. Initially Dhirubahiworkedasadespatch clerkwith A. Besse & Co..Two yearslater A. Besse & Co. becamedistributor

for Shellproductsand Dhirubhai waspromotedto managethecompanys oil-fillingstationattheport ofAden. Hewas marriedto Kokilaben andhadtwo sonsandtwo daughters.


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Lifein Aden

Inthe 1950sthe Yeminiadministrationrealizedthattheirmain unit ofcurrency Rial wasindisappearing. Afterinvestigatingthe matteritwasrealizedthatall Rials wereroutedto the Port City ofAden. Thereayoung manin

twentieswasplacing unlimited buy orders ofYemini Rials.Duringthosedaysthe Yemini Rial wasapuresilvercoinandwas much indemandattheLondon BullionExchange.Young Dhirubhai would buy Rial, meltitinpuresilverandsellitto bulliontradersinLondon. Inthelaterpart ofhislifewhiletalkingto reportersitis believedthat hesaid The

marginsweresmall butitwas moneyforjam. Afterthreemonths, itwasstopped. But I madeafewlakh ofrupees. Idont believeinnottaking opportunities.


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Reliance Commercial Corporation

Tenyearslater, Dhirubai returnedto Indiaandstartedabusiness Reliance Commercial Corporationwith acapital ofRs. 15000.00 (US$ 375). Theprimary business ofRelianceCommercial Corporationwasimportpolyesteryarnand

exportspices. The businesswassetupinpartnershipwithChambaklal Damani , hissecondcousinwho wasalso therewith him in Aden , Yemen. Thefirst office ofRelianceCommercial Corporationwasset upat Narsinathan Streetat Masjid Bunder . Itwasa 350 Sq. Ft.room with atelephone, onetableandthreechairs. Initiallythey had

two assistantsto helpthem intheir business. In 1965Chambaklal Damani and Dhirubhai Ambani endedtheirpartnershipand Dhirubhai started on his own.


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Itis believedthat both haddifferenttempermants andadifferenttake on business, while Mr. Damani wasacautioustraderanddidnot believein building Yarninventories, Dhirubhai wasaknownrisktakerand he

consideredthat buliding inventorieswith anticipatingapriceriseand makingsomeprofitisgoodforgrowth.Duringthisperiod Dhirubahi and hisfamily usedto stayinan one bedroom apatment in Jaihind EstateinBhuleshwar. In 1968 he movedfrom thechawl to an

upmarket apartmentat Altamount Roadin SouthMumbai. Hisfirstcarwas Premier Padmini , the Indianversion ofFiat 1100 , later he broughta Mercedez-BenzCar. In 1970s he broughtawhite Cadillac Car.


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Reliance Textiles

Reliance Textiles Sensinggood opportunityinthe businessoftextiles, Dhirubhai started hisfirsttextile millat Naroda ,near Ahmedabad intheyear 1966 . Textilesweremanufactured usingpolyesterfibre yarn. Dhirubhai started

the brand Vimal, which wasnamedafter hiselder brotherRamaniklal Ambanis son Vimal Ambani.Externsivemarketing ofthe brand Vimalintheinteriors ofIndiamadeita householdname. Franchiseretail outletswerestartedthat usedto sell only Vimal brand oftextiles. Intheyear 1975 a Technicalteam from the World Bank visited

Reliance Textiles Manufacturing unit. This unit hastheraredistinction ofbeingcertifiedas excellenteven bydevelopedcountrystandardsinthatperiod.


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Initial Public Offering

Dhirubhai Ambani iscreditedwith startingtheequitycultin India. Morethan 58,000investorsfrom variousparts ofIndia

subscribedto Reliances IPO in 1977.Dhirubhai wasableto convincepeople ofruralGujrat that beingshareholders ofhiscompanywill only bringreturnsto theirinvestment.

Reliance Industries holdsthedistinctionthatitisthe only PublicLimited Companywhoseseveral Annual General Meetingswere heldinstadiums. In 1986, The Annual GeneralMeetin ofRelaince Industrieswas heldin


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Dhirubhais Control Over Stock

Exchanges In 1982 Reliance Industrieswascoming upwith arightsissue ofpartlyconvertibledebentures. Itwas

rumoredthatthecompanyis makingalleffortsto ensurethatthestockpricesdidnotslideainch. Sensing

an opportunitya bearcartelwhich wasagroup ofstock brokersfrom Calcuttastartedto shortsellthe

shares ofReliance. To counterthisagroup ofstock brokerstillrecentlyreferredas Friends ofReliance

startedto buytheshortsoldshares ofReliance Industries on Bombay StockExchange. The Bear Cartel

wasactingwith a beliefthatthe Bullswill beshort ofcash to completethetransactionandwould beready

forsettlement underthe Badlatradingsystem prevalentin Bombay StockExchangeduringthosedays.The bullskept on buyingandaprice ofRs. 152 persharewas maintainedtilltheday ofsettlement. Onthe

day ofsettlementthe Bear Cartelwastakena backwhenthe Bullsdemandedaphysicaldelivery ofshares.

To completethetransactionthe much neededcash wasprovidedto thestock brokerswho had brought

shares ofReliance bynone otherthan Dhirubhai Ambani. Incase ofnon-settlementthe Bullsdemanded

an Unbadla (penaltysum) ofRs. 35 pershare. With thisthedemandincreasedandtheshares of

Relianceshotabove 180 rupeesin minutes. Thesettlementcausedenormous uproarinthe marketand

Dhirubhai Ambani wasthe unquestionedking ofthestock markets. Heprovedto hisdetractorsasto how

dangerousitisto playwith Reliance. Thesituationwascompletely out ofcontrol. To getasolutionforthissituationthe Bombay StockExchangewasclosedforthree businessdays.


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Authorities ofBombay StockExchangeintervenedinthe matterandbroughtdownthe Unbadlarateto Rs. 2 with astipulationthatthe Bear Cartel hasto givethedelivery ofshareswithinfewdays.The Bear Cartel broughtshares ofReliancefrom the marketathigherpricelevelsanditwasalso realizedthat Dhirubhai Ambani

himselfsuppliedthosesharesto the Bear Cartelandearnedahealthyprofit out ofThe Bear Cartelsadventure Afterthisincidentmany questionswereraised by hisdetractorsandthepress. Notmanypeoplewereableto understandasto howayarntradertillafewyearsago wasableto getinso much ofcash flowduringthecrisis. Theanswerto thiswasprovided bythenfinance minster

Pranab Mukherjee ]intheparliament. Heinformedthe housethatNon-Resident Indian hadinvested upto Rs. 220 Millionin Relianceduring 1982-83. Theseinvestmentswereroutedthrough manycompanieslike Crocodile, Lota and Fiasco. Thesecompanieswereprimarilyregisteredin Isle ofMan. Theinterestingfactorwasallthepromoters or owners ofthesecompanies hadacommonsurname Shah . Aninvestigation bythe Reserve Bank ofIndiaintheincidentdidnotfindany unethical orillegalacts ortransactions


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Diversification Overtime

His business hasdiversifiedinto acore

specialisation inpetrochemicalswith

additionalinterestsintelecommunications ,

informationtechnology , energy , power ,

retail , textiles , infrastructureservices, capital

markets , andlogistics. Thecompanyasa

wholewasdescribed bythe BBC as abusinessempirewith anestimatedannual

turnover of$12bn, andan 85,000-strong

workforce.


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Criticism

Despite hisalmost Midas Touch, Ambani hasknownto haveflexible valuesandan unethicalstreakrunningthrough him. His biographer

himselfhascitedsomeinstances ofhis unethicalbehaviorwhen hewasjustan ordinaryemployeeatapetrolpumpin Dubai. He hasalso beenknownto havelinkswith the V P Singh

governmentandlaterthe BJP government. Hehas beenaccused ofhaving manipulatedgovernmentpoliciesto suit his ownneed, andhas beenknownto beaking-makerin

governmentelections. Although most media-


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Unauthorized Biography

Hamish McDonald, who wasthe Delhi bureau

chiefforthe FarEasternEconomic Reviewfor

severalyears, publishedan unauthorised

biography ofAmbani in 1998 inwhich both his

achievementsandshortcomingswere

reported, butthe Ambanis threatenedlegal

actionifthe bookwaspublishedin India.


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Death

Dhirubhai Ambani wasadmittedto the Breach CandyHospitalin Mumbai on June 24 , 2002 dueto a majorbrainstrokesuffered by him. Thiswasthesecondstroke, thefirst one had occurredintheyear February

1986 and hadkept hisright handparalyzed. Hewasinastate ofcomafor morethanweek. A battery ofhighlyefficientdoctorswere unableto save hislife. Hebreathed hislast on July 6 , 2002 , ataround 11:50P.M.(Indian Standard Time). Hisfuneralprocessionwas

not onlyattended by businesspeople, politiciansandcelebrities butalso bythousands ofordinarypeople.Hiselderson Mukesh Ambani performedthelastritesasperthe Hindu traditions. HewascrematedattheChandanwadi Crematorium in Mumbaiataround 4:30

PM (Indian Standard Time) on July 7 , 2002 . Heissurvived b Kokilaben Ambani hiswife two sons


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Film

A film inspired bythelife ofDhirubhai issetto

releasein January 2007. The Hindi Film Guru ,

directed by Mani Ratnam and music by

A.R.Rahman willshowthestruggle ofa man

who strivesto make his markinlife. The

moviestars Abhishek Bachchan and Aishwarya

Rai inleadingroles.


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Awardsand Recognitions

November 2000 Conferred Man oftheCenturyaward by Chemtech FoundationandChemicalEngineering Worldinrecognition ofhisoutstandingcontributionto thegrowth anddevelopment ofthechemicalindustryin India2000 , 1998 and 1996 Featuredamong Power50 the mostpowerfulpeoplein Asia byAsiaweek magazine. June 1998 Deans Medal by

The Wharton School, University ofPennsylvania ,forsettingan outstandingexample ofleadership.August 2001 TheEconomic Times AwardforCorporateExcellenceforLifetime AchievementDhirubhai Ambani wasnamedthe Man of20th

Century bythe Federation ofIndian Chambers of


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Famous Quotes

From beginning Dhirubhai wasseenin high-regard. Hissuccessinthepetro-chemical businessand hisstory ofragsto riches made him acultfigureinthe minds ofIndianpeople. Asa quality ofbusinessleader hewasalso a motivator. Hegave veryless ofpublicspeeches butthewords hehasspokenarestillrememberedfortheir value. Growth hasno limitatReliance. I keeprevising my vision. Onlywhenyou dream ityou cando it.Think big, thinkfast, thinkahead. Ideasareno ones monopoly Ourdreams haveto be bigger. Ourambitions higher. Ourcommitmentdeeper.And oureffortsgreater. Thisis mydream for Relianceandfor India. Youdo notrequireaninvitationto makeprofits. Ifyou workwithdeterminationandwith perfection, successwillfollow. Pursueyourgoalsevenintheface ofdifficulties, andconvertadversitiesinto opportunities.Givetheyouth aproperenvironment. Motivatethem.Extendthem thesupporttheyneed.Each one ofthem hasinfinitesource ofenergy. Theywilldeliver. Between mypast, thepresentandthefuture, thereis onecommonfactor: Relationshipand Trust. Thisisthefoundation ofourgrowth We bet onpeople. Meetingthedeadlinesisnotgoodenough,beatingthedeadlinesis myexpectation. Dontgive up, courageis myconviction.

Think big, thinkfast, thinkahead , ideasareno ones monopoly

Ourdream haveto be bigger. Ourambitions higher. Ourcommitments


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Growth through Vision

Growth hasno limitat Reliance. I keeprevising

my vision.

Onlywhenyou candream it, you cando it.

Between mypast, thepresentandthefuture,

thereis onecommonfactor: Relationshipand

Trust. Thisisthefoundation ofourgrowth.

- Dhirubhai H. Ambani


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DHIRU BHAI AMBANI Group Presentation

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