Finding Success in a Third World Country
In a country rich in culture and wounded by poverty, success stories are treasured and commemorated. One man proved that amidst the impoverishment that identified the nation among other countries, a rags-to-riches achievement is possible.
Dhirajlal Hirachand Ambani, also known as Dhirubhai Ambani was born on December 28, 1932 at Chorwad, Junagadh, an impoverished village in India. Even at an early age, Dhirubhai was said to have exercised his innate entrepreneurial skills by selling fried snacks (pakora) to pilgrims in Mount Girnar over the weekends. At the young age of 16, he moved to Aden (in Yemen) to work as a dispatch clerk in A. Besse & Co., a French trading company, that is the biggest supplier of major amenities for the entire city at that time, for a salary of Rs.300 (nowadays, roughly 6 USD ). Two years later, the company became the sole distributor of Shell products and Dhirubhai was promoted to manage the station located at the port of Aden.
After 10 years, Dhirubhai returned to India to start his own company, Reliance Commercial Corporation, with a capital of Rs.15,000.00 (these days around 304 USD), and together with his second cousin, Champaklal Damani. The primary business of the company was to import polyester yarn and export spices. The two cousins, however, ended their partnership in 1965. Despite the rumors that this was evoked by differences in personality and business outlook, this led to Dhirubhai starting on his own.
Dhirubhai was a known risk-taker. He allowed stockpiles- where prices would eventually increase later, and eventually make profit. His earlier entrepreneurial days showed how he adapted 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. Dhirubhai was always a step ahead of the competitors. With the imported items being heavily in demand, his profit margins were rarely under 300 percent.
In 1966, sensing a good opportunity in the textile business, Dhirubhai started his first textile mill at Naroda, Ahmedabad. With extensive marketing and new franchise retail outlets only selling “Vimal” brand of textiles, the brand became a household name. In 1975, a Technical team from the World Bank visited the Reliance Textiles’ Manufacturing unit. The unit had the rare distinction of being certified as “excellent even by developed country standards” during that period.
Dhirubhai is also merited for starting the equity cult in India. He was able to convince the people of Gujarat to become shareholders of his company. More than 58,000 investors from various parts of India subscribed to his company’s IPO in 1977. This initiation actually changed the plot for corporate India and scripted an equity growth story that will never end. On April 30, 1982, Dhirubhai demonstrated the lengths he would go to protect ordinary shareholders. In an act of defiance against a bear cartel that had been hammering down his company’s stock for weeks, Dhirubhai bought nearly a million shares the cartel had offloaded. This prompted a crisis on the Bombay Stock Exchange resulting to its closure for three days. The event made retail investors treasure him and ensured him a place in India’s stock market history. He crumbled the notion that companies are exclusive to rich men and involved millions of Indians in his company’s growth and its profits.
Over time, Dhirubhai diversified his business with the core specialization being in petrochemicals, and additional interests in telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics. He was addressed with various rumors and controversies throughout his life. He is also known for various conflicts with competitors. These clashes eventually ended shortly after Dhirubhai suffered his first stroke. A second stroke would occur on June 24, 2002, placing him in a coma. After more than a week of being in a state of coma, Dhirubhai died on July 6, 2002.
While Dhirubhai was recovering in San Diego after his first stroke, his sons Mukesh Ambani and Anil Ambani managed the business affairs. After his death, however, the brothers admitted differences amongst them regarding ownership issues. This was resolved by their mother, Kokilaben Ambani, by splitting the family’s various business enterprises. Older Mukesh age 50, is ranked 5th net worth $43 Billion by Forbes amongst the world’s billionaires as of year 2008, handled petrochemicals, while younger Anil age 48 is ranked 6th with net worth of $42 Billion by the same group and managed Reliance Infocomm, Reliance Energy and Reliance Capital.
Among the top billionaires 3 are from India, the brothers Ambani and KP Singh age 76 the real estate mogul with a net worth of $30 Billion.
For further reading:
http://www.dhirubhai.net/
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
Leave a comment