Heirloom rests in able hands
Not a life, a generation
Wealth wizard forked fortunes

Mumbai, July 7: 

Key tests lie in oil, telecom

The legacy may weigh heavily on the shoulders of the two brothers — Mukesh and Anil Ambani — as they steer the Rs 65,000-crore colossus Reliance Industries through the crossroads.

This comes at a time when the group has taken its first tentative steps in sectors as diverse as infocom, retailing of petro-products, power and perhaps go the whole hog into life sciences after attaining a dominant share in the country’s polyester and petrochemical businesses.

Long before Bill Gates changed his job profile at Microsoft, Dhirubhai Ambani had devised a new role for himself as a mentor at Reliance, leaving the day-to-day management of the group in the hands of his two sons. The few hours he spent in the office was basically spent in strategising and it was said that the aggressive bid for IPCL stemmed from Dhirubhai’s prodding.

Bidding for the petroleum companies — HPCL or BPCL, both of which have a combined 40 per cent market share in the retail market of petro products, may be the first challenge that they will face.

The group’s strategy on power is yet to crystallise, say observers, and some fine-tuning of its in-house mega-crore power projects with its bulge bracket acquisition of BSES will be a challenging task for the two brothers.

The power and telecom forays will require huge cache of funds, and while the group is known for its dexterity in tapping money from across the world, it may have to prioritise its needs in the coming years, say observers.

“Without the charisma of their dad, and in the backdrop of the global meltdown in the telecom sector, it would be interesting to see how they are going to raise the money for funding the new projects and also ensuring its viability.”

Reliance without Dhirubhai may be hard to imagine but the 13 days when the two sons managed the company while the patriarch was battling for his life may bolster the confidence of many investors in the ability and acumen of Mukesh and Anil.

The group is known for its aggressive approach in tapping funds, be it the convertible bonds or the 100-year yankee bonds. Reliance’s Infocom venture alone has earmarked Rs 15,000 crore.

The infocom blueprint is still hazy for outsiders as the group has bet heavily on the basic telephony sector despite its presence in cellular telephony. It also hopes to ride on wireless in local loop (WiLL), while players like the Tatas and Bhartis have hedged their the bets in cellular and basic.

In petrochemicals too, where the group is now counted among the top five global producers in certain products, the challenge will now be to move further up the ladder, analysts say.

Yet, questions may be raised as the levers of control are passed onto the two brothers. Can the two brothers control the same steering wheel? The company observers are emphatic when they say that this will not pose a problem.

The two sons have contrasting styles. While Mukesh is the introverted hands-on manager, Anil is an extrovert who networks with the people that matter.

The roles could be complementary, commented an observer. Mukesh might takeover as chairman, and may be the first among equals, as Dhirubhai deemed.


July 7: 
Corporate India united in a pantheon to heap tributes on a man who changed the way business leaders were measured on the scale of success.

Descending on Sea Wind in Cuffe Parade ever since Dhirubhai’s body was wheeled in, was a throng that had barons, chamber leaders and stock sorcerers. “Industry will never be able to fill the void created by Dhirubhai’s demise. He dreamt of 1000 Dhirubhais,” Bajaj Auto chief Rahul Bajaj said.

Adi Godrej, a close Ambani friend, said while a great visionary has been lost, Reliance would continue to grow. Kumar Mangalam Birla said: “Dhirubhai built an empire that was very strong in fundamentals. He will remain an icon.”

R. P. Goenka said business is poorer by the loss of its star performer “Generations to come would find it difficult to believe that so much could be achieved by one man in life.” CII president Ashok Soota said the country had lost a visionary and an inspiring leader. “Through Reliance, he showed the corporate India the essence of thinking big.”

“The nation is impoverished. He stood for the courage of conviction and passion for excellence,” PHDCCI president Arun Kapoor said. Ficci president Rajendra S. Lodha said Dhirubhai took Indian entrepreneurship to world standards.

“He is one person who achieved in one life time, what many generations could not. He is the tallest 20th century businessman, in India and abroad,” Vinay Bharat Ram, CEO of DCM, said.

Sebi chief G. N. Bajpai said Dhirubhai was a hero for small shareholders because Reliance was able to reward its investors more than any other Indian company. Even Ketan Parekh, whose shenanigans rocked bourses last year, said it was Dhirubhai who fostered the equity cult in India.


Calcutta, July 7: 
Those who believed in Dhirubhai Ambani’s abilities as an entrepreneur and invested Rs 1,000 in Reliance Industries’ shares when it went public in 1977, are today richer by over Rs 1,50,000. That’s what millions owe to Dhirubhai Ambani, arguably the country’s greatest creator of wealth.

Reliance went public in late 1977 with a small public offer of 28 lakh shares. Since then, its turnover has grown over 400 times, and profit by around 1000 times. Along with it have grown Reliance’s market capitalisation and shareholder base.

“Reliance’s public issue was over-subscribed, but selling it was not easy,” recounts Ajit Kumar Day, one of the 30-odd underwriters to the issue. “Clad in a white safari-suit and a pair of chappals, Dhirubhai met us in a Mumbai hotel. He briefed us about his company and later accompanied us on a visit to his factory.

“We were convinced about the abilities of the man. But in those days, multinational companies ruled the bourses. We had to hard sell Reliance’s public issue, but even before the shares were listed, they were trading in the unofficial market at a small premium. Those who had invested certainly did not regret,” Day said.

A person who had bought 100 shares of Reliance in 1977 for Rs 1,000, and did not sell any share so far, today owns 512 shares, having received 412 shares as bonus over the last 25 years. At the current market value of Rs 263 per share, his holding in Reliance is worth Rs 1,34,800. He would have also received nearly Rs 25,000 as dividend over the last quarter of a century.

An investor who bought 100 shares in 1977, and subsequently subscribed to all rights issues of the company, would today have 2,174 shares. He would have received 1,310 shares as bonus, and paid Rs 45,379 to buy 864 shares through rights issues. The current value of his investment would be Rs 5,72,000, and he would have received close to Rs 80,000 as dividend. Reliance has been most generous in rewarding investors, and Dhirubhai has never had to worry about capital.

Still wonder why millions joined the Ambanis in the cremation of Dhirubhai, and many more sacrificed soaps and movies on a Sunday evening to watch it live on television?


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