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The Ambanis - Most powerful
business family in India
 The
Reliance Industry led by Dhirubhai H.Ambani is
in the limelight for not only being India's biggest
industry but also as a force to reckon with in the sub-continent.
In the past few weeks alone, Reliance has been
the 'cover story' in many prestigious media including
"The Business Week".
Dhirubhai Ambani, a native of Gujarat and son of a school
teacher opened a modest textile mill in Gujarat in 1966.
In less than 40 years, he made Reliance into India's
biggest industrial empire overtaking Tata and
Birla.
This year Reliance posted a total revenue of
Rs. 60,177 crores ($ 12.9 billion). Compared
to this, Tatas did around Rs. 42,000 crores while the
A.V. Birla Group did Rs. 28,000 crores. The net profit
of Reliance was Rs. 4,222.64 crores, which is more than
the combined profits of Rs. 4,100 crores of Tata & Birla
for the last fiscal year.
The turning point for the Ambanis was in October 1977
when they issued 2.8 million shares of Reliance Textiles
(Brand names - Vimal, Harmony...) to raise $
1.8 million - and that was the largest public issue
in India at that time!
One of their "secrets to success" was to make
sure that all the investors were well rewarded. In the
last 5 years alone, the investors have earned returns
of over 27%. He believes that if he makes the shareholders
happy they will continue to give him more money.
 Another
secret formula of the Ambanis is to cultivate the License
Issuing politicians and bureaucrats in New Delhi. In
fact he even hired influential bureaucrats after their
retirement so that he knows which string to pull and
for what. Ambani also contributed generously for political
campaigns. Reliance is not only the favourite for the
Indian but also for overseas investors.
Ambani's are known for their professional financial
management and during the construction of their $3.4
billion refinery in Gujarat; Reliance's debt at any
point in time never crossed 3.5 times its cash flow.
Dhirubhai Ambani has two sons - Mukesh (a Stanford
university graduate) and his younger brother Anil
(a flamboyant Wharton Business School prodigy). The
two brothers along with their father form a formidable
force in today's business scenario in India. All three
of them operate from their office at Nariman Point
in Mumbai.
Even though Reliance started in textiles, it diversified
into polyester & plastics. In 1993 the group used its
clout to convince the Indian government to help them
put up 'state of the art petroleum refinery' at Jamnagar,
Gujarat which can help India reduce its refining
bill. Today Reliance petroleum refinery at Gujarat can
process half a million barrels of crude oil per day
which is a quarter of India's domestic requirement.
 Reliance's
current focus is on the telecom industry. They are spending
a whopping $5 billion to build 60,000 km of fiber optic
backbone, criss-crossing 115 cities in India. Many feel
that Reliance is investing too much of money on these
fancy infrastructures when the country is not ready
for it. But Anil Ambani says, 'we want to
be "carriers-carrier" for broadband and Internet data.'
They are also looking at utilizing this fibre optic
infrastructure to dominate and monopolize the Indian
telecommunication market. In fact, last January, the
Ambanis tried their best to make the government change
the telecom policy to suit their interest. If they would
have succeeded, Reliance could have undercut its rival
mobile operators price substantially.
Unlike Koreans or Japanese, Reliance has never pursued
global strategy and its main market as of now is India.
Source: Business Week and other websites
Reliance Industries Ltd - www.ril.com
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