Reliance Industries

Great Indian Business Legacy -- Reliance

PREFACE

“Growth is Life” 1


WHY “ONLY DHIRUBHAI ”?

It did not take me a long time to decide my project topic, as I was very

sure about doing such a project that has always fascinated me. Only thing

that took me a long time was to decide which Indian business legacy to work

on. There have been wonderful Indian businessmen over the years that have

put their names on the business map of the world. They have not only

brought glory to themselves but also to our Mother India. They not only

worked hard but also smart. They seized the opportunities as and when it

appeared. They are Badshahs of their own field. Some are rags to riches

and some were born with a silver spoon. Some were college dropouts while

some were masters from various famous schools. All have made a good

fortune but one name that stands apart from all is Dhirubhai Ambani. Born to

a schoolteacher in the tiny village of Chorwad he always dreamt big from

childhood days. He taught the common man to “think big” and he initiated

the equity cult. He was the man who provided indirect employment to 3

million Indians. The most significant thing about him is that he not only

survived the “license raj” but also grew after 1991 (liberalisation of Indian

economy). Not only he had beautifully managed the brick and mortar

companies but also was about to implement the new age projects. Although

he had left taking active part in the day to day affairs of the company he

always had the say in implementing major projects of reliance. His “no”

would mean that Reliance would not implement that project. He was the

messiah of the common investor. He never recognized failures. He had

that uncanny knack of gut feeling about success. He rewrote the rules of

the game of business and had trained his two sons for the future. He is the

best example of a start-up strategy. But the truth remains that Reliance

could be vulnerable after Dhirubhai’s death. It remains to be seen where

Mukesh Ambani takes Reliance from here onwards. He not only has the extra

responsibility of being the “karta” of the reliance family but also has to

ensure that the relationship with his brother will stay as good as it was when

dhirubhai was alive. Where will reliance go from here??? Only time will tell.

This story about Reliance includes every ingredient required to script

great success stories.





SUMMARY

I have tried to cover in my project the story of a common person who

succeeded in life due to sheer determination. All the aspects of Reliance right

from its inception and its current status are covered in the project. The major

aspects of my project include the milestones of Reliance in the past

decade, Reliance’s impact on India’s economy, its humble

beginnings, the Growth of Reliance, Pre-globalisation license Raj,

mergers and acquisitions, the Equity cult and the ups and downs of

Reliance.

Also this project gave me an opportunity to script what lessons we as

management students can learn from Dhirubhai. We as management

students can learn more from Dhirubhai Ambani than some of the text books.

Also covered in the project is the SWOT analysis of Reliance. The

comparison between the two brothers – Anil and Mukesh is worth noting.

A section on new age companies of Reliance and how it will benefit

from these companies is also written. One more interesting thing covered is

how the two brothers have successfully been able to manage and expanded

the great Emprire of Reliance.

Also, perceptions of the corporate world and the student

community have been inculcated in the project to reiterate the fact that

Reliance is a truly great company.



DHIRUBHAI’S LEGACY: A RS 65,000-CRORE EMPIRE

Reliance Industries Ltd (RIL), India’s largest private sector company, has

come a long way from its humble beginning, thanks to Dhirubhai Ambani. The

Reliance Group has over 10 companies under its fold now. All companies

function in a much centralised style of management, and were cherished

under Dhirubhai’s firm authority on his empire.

The companies are: Reliance Industries Limited, Reliance Capital Limited,

Reliance Capital Mutual Fund, Reliance Industrial Infrastructure Limited,

Reliance Energy, Reliance Telecom, Reliance Infocomm, Reliance General

Insurance Co Ltd, Reliance Life Sciences, Indian Petrochemicals Corporation

Ltd.

The Rs 65,000-crore Group has grown by leaps and bounds over the last five

decades. The company was conceived with an investment of as less as Rs

15,000, and today, it is the largest private sector company in India. It now

boasts of a total sales of Rs 65,000 crore, net profits of Rs 4,400 crore, cash-

flow of Rs 6,800 crore and total assets of Rs 55,000 crore. The company also

figures in the list of Fortune 500 companies at the 425 mark, with interests in

textiles, synthetics fibers, fiber intermediates, petrochemicals, refining, oil

and gas, financial services, insurance, power, telecom and infocom initiatives.

Looking forward, the task ahead for Anil and Mukesh is to maneuver the

Group through the 21st century, at the same pace as earlier. New forays into

telecom (where it is a late entrant) and biotech will be critical for the Group

to develop a strong gameplan. The company is making investments in

retailing in the petroleum sector which would ensure huge returns. The

company has already chalked out a Rs 500-crore plan for this.

It owns a textile manufacturing facility at Naroda near Ahmedabad in Gujarat,

fibres, fibre intermediates and chemicals at Patalganga near Mumbai,

polymers, chemicals, fibres and fibre intermediates in Hazira and a refinery at

Jamnagar. The Group also has a 30 per cent stake in Panna, Mukta and Tapti


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oil and gasfields in north-west Mumbai. It has made forays into new initiatives

in telecom, power, engineering, procurement and construction,

infrastructure, infocom, insurance, coal-bed methane (CBM) and life sciences.

It has grown tremendously over the last decade when the Government’s

economic reforms set free the country’s business environment from the

earlier shackles of licensing, Fera and high taxes.

Since it went public in 1977, Reliance has set several corporate records. One

of these is for growth in its assets. Over the years, the company has

rewarded its shareholders handsomely. Anyone who resisted the market’s

skepticism when the firm went public in 1977, invested even a small amount

in debentures and shares, and purchased all subsequent additional rights

offerings, has seen his money multiply to well over a hundred times the

original investment.

In 1985, Reliance notched the record of collecting Rs 400 crore from an

estimated 1.5 million investors through the issue of non-convertible

debentures. Today, nearly three million people hold shares in RIL and its

sister concerns. In 1985, Reliance notched the record of collecting Rs 400

crore from an estimated 1.5 million investors through the issue of non-

convertible debentures.

The group owns the world’s largest grass root refinery at Jamnagar in Gujarat

with a capacity of 27 million tonnes per annum. It is the first and the only

refinery to be set up in the private sector in India. The company is also

expected to hike capacity to 54 million tonnes in the Tenth Plan. The group is

today India’s largest business house and has been chosen as ‘India’s Most

Admired Business House’ in the Taylor Nelson Sofres-Mode survey for 2001,

conducted for Business Barons magazine, June 2001.

With the merger of Reliance Petroleum Ltd into RIL, the merged entity has

the distinction of becoming India’s first private sector company to feature in

the internationally tracked Fortune Global 500 list of the world’s largest

corporation. The merged entity also ranks among the top 225 companies

globally in terms of net profits, among the top 300 companies globally in



terms of net worth among the top 425 companies globally in terms of assets

and among the top 500 companies globally in terms of sales.

Reliance is the largest exporter from India, with exports crossing $2 billion.

The company already exports to over 100 countries, which displays its global

competitive strength—a dream that its founder Dhirubhai would have loved

to pursue.



RELIANCE - MAJOR MILESTONES

1992-2004

“Glorifying the past decade”

1992

Offered the first ever Euro Issue of Global Depository Receipts

by an Indian company

Set a record with Reliance Twin issues that received over 1 million

investor

Applications

1993

Sales crossed Rs. 4,000 crores making Reliance India’s largest

private

sector company

Offered the first Euro Convertible bond issue

India’s largest public offering – Reliance Petroleum Issue

1994

Offered the second Euro issue of GDR

1995

Net profit crossed the Rs.1,000 crore mark (Rs 1,065 crores or US$ 338

million), unparalleled in the Indian Private sector

1995-96

Reliance became the first private sector company to be rated by

international credit rating agencies. S&P rated BB+, stable

outlook, constrained by the Sovereign Ceiling. Moody’s rated Baa3,

Investment grade, constrained by the Sovereign Ceilings



1996-97

Completion of Rs. 9,000 crore (US $ 2.5 billion) Hazira complex

increasing production capacity from 1.5 million tonnes to more than 6

million tonnes

1997

First corporate in Asia to issue 50 and 100 years bond in US

debt market

1999-2000

Jamnagar Petrochemicals complex and bulk of integrated refinery

complex commissioned comprising:

World’s largest grassroots refinery,India’s largest port and

World class product handling, storage and despatch facilities.

2000

Started commercial production of 27 million tpa refinery, the 5th

largest

in the world

Increased stake in BSES by an open offer

Launched share buyback program

Reliance Infocom plans announced

2001

RIL and RPL become India’s two largest companies in terms of all major

financial parameters

2002

RPL’s merger with RIL to create India’s first and only private

sector Fortune Global 500 company

Reliance acquires government’s 26% stake in IPCL, India’s 2nd largest

Petrochemicals Company

Launch of Reliance Infocomm in December



2003

BSES becomes part of the Reliance Group Mr. Anil D. Ambani

Appointed BSES Chairman

Reliance enters World's Most Respected Companies List( financial

times)

Reliance Life Sciences and Thyrocare Technologies Limited join hands

to offer Molecular Genetic Testing Services

Reliance bags IMC National Quality Award for Hazira plant

RIL - First Indian private sector company to record net profit of over Rs

4,000 crore in one financial year

Mukesh Ambani nominated as Chairman of the Foundation for the

International Federation of Red Cross and Red Crescent Societies

Reliance and DuPont Polyester Technologies Sign Agreement for R&D

Strategic Alliance

Reliance ranked in the Forbes Global 500

Reliance bags FIEO Export Awards

Reliance announces Strategic Alliance with BRPL ( subsidiary of IOC)

Reliance in 2003 - A year of challenges and achievements

Reliance wins National Energy Conservation Award

Reliance in Top 2 'Overall Leadership' amongst Indian companies

Reliance gets National Award for Excellence in Corporate Governance

'Sword of Honour' for Reliance - British Safety Council Award for

Excellence in Safety

Reliance gets an award for Corporate Social Responsibility


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2004

Reliance Refinery Emerges World Leader in Energy Performance

- Best Performance in Asia-Pacific region

Reliance to set up World's largest gas based power project of

3,500 MW capacity in Uttar Pradesh, India

Ambanis on the cover of 'Time'

Reliance Group emerges as India's Largest Wealth Creator in the

private sector for the Year 2003-04

First private sector company in India to record a Net Profit of US

dollar over 1 billion

Reliance Industries wins NASSCOM's 'IT Excellence Award'

Mukesh Ambani voted world's most influential person in

Telecoms in 2004

Reliance Industries ranks No.2 in 'India's Most Respected

Companies' survey

Reliance has proved that with laser-sharp management and vision it is

possible to defy worldwide trends like falling petrochemical prices and factors

such as the South East Asian crisis, which have taken a toll of many other

Asian corporates. Reliance has one of the largest marketing networks in the

Indian industry. All its brands are market leaders.

There was only one driving force behind all these achievements, and

that is Dhirubhai Ambani!!!!!!!!

RELIANCE: - DOES INDIA RELY ON RELIANCE???

THE FIGURES REVEAL:













India's No. 1 Business Group

Founded as a textile mill in 1966 by Dhirubhai H. Ambani, the Chairman of

the Reliance group, Reliance continued to be a textile company until early

1980s.

However, seizing the opportunities emanating from the growing Indian

economy as well as the opening up of the regulation-driven sectors of the

economy such as petrochemicals, plastics etc., Reliance pursued the policy of

backward integration from textiles as well as diversification from the early

1980s onwards to set up world-scale facilities for manufacturing polyester

and textile intermediates, plastics and polymer intermediates, detergent

intermediates etc.

Today Reliance is the largest, fastest growing and most valuable

business group in India.

Reliance Group is India's largest business house with total revenues of Rs

62,000 crores (US$ 13.2 billion), cash flow of over Rs 6,800 crores (US$ 1.5

billion), net profit of over Rs 4,400 crores (US$ 950 million) and exports of Rs

9,370 crores (US$ 2 billion). The Group has total assets of Rs 55,000 crores

(US$ 11.8 billion) and market capitalisation of around Rs 60,000 crores (US$

12.7 billion).

Diversified business interests

Reliance group's business activities encompass all major growth sectors of

the Indian economy:

- Oil & gas exploration

- Refining & marketing

- Petrochemicals including intermediates

- Textiles

-Energy

- Telecom

- Information Services



- Insurance

- Financial services and so on

India's top private sector company

Reliance Industries Ltd. (RIL) is India's top private sector companies in

term of all major financial parameters.

RIL is the largest private sector company in India in terms of net worth,

assets and net profits, and is second only to RPL in term of sales.

Other major companies in the Reliance group are Reliance Capital Ltd.,

Reliance Industrial Infrastructure Ltd., Reliance Power Ltd., Reliance Telecom

Ltd., Reliance InfoComm Ltd., Reliance Life Insurance Company Ltd, Reliance

General Insurance Company Ltd.

Market leader in India

Reliance holds major market shares for all its major products in India

Polyesters (Filament Yarn, Staple Fibre and Resin) 55 %

Fibre Intermediates (Purified Terephthalic Acid, Mono

Ethylene Glycol, P-Xylene)77 %

Polymers (Polyethylene, Polyproplene, PVC) 50 %

India's largest exporter

With all its products conforming to the highest international quality

standards, Reliance is India's largest exporter with exports of Rs.9, 370 crores

or US$ 2 billion in the fiscal year 2001.

Individually, too, RIL and RPL are India's top two exporters.

Role in the Indian economy

The Reliance group's leadership position in India is reflected in its all round

contribution to the Indian economy.

The Reliance group contributes –

3.5% of India’s GDP



6% of India’s total exports

10% of Indian government’s indirect taxes.

Global rankings

Having world-scale manufacturing facilities for all its major products,

Reliance ranks among the global top ten in all its major products:

Product Global rankRank in Asia-Pacific

region

Paraxylene 3 1

Polypropylene 5 1

Polyester Filament Yarn (PFY) 5 3

Polyester Staple Fibre (PSF) 5 3

Purified Terephthalic Acid (PTA) 5 3

Mono Ethylene Glycol (MEG) 10 1

Role in the Indian corporate sector:

RIL alone accounts for:

17 per cent of the total profits of the private sector in India

7 per cent of the profits of the entire corporate sector in India

6 per cent of the total market capitalisation in India

Weightage of 13 per cent in the BSE Sensex

Weightage of 10 per cent in the Nifty Index

Reliance Infocomm



Reliance Infocomm (RIC) is India's largest mobile service provider with over 7

million customers. Reliance Infocomm has established a pan-India, high-

capacity, integrated (wireless and wire line) and convergent (voice, data and

video) digital network, to offer services spanning the entire Infocomm value

chain - infrastructure, services for enterprises and individuals, applications

and consulting.



HUMBLE BEGINNINGS OF RELIANCE

While Dhirubhai is arguably the best Indian businessman of the century he

always told the media people to report his past life - A life full of struggles

and simple livelihood. He wanted to communicate to every Indian that

though he might be living in poverty now he can definitely make a future out

of sheer determination and hard work.

AMBANI’S FAMILY TREE

Dhirajlal Hirachand Ambani (‘Dhirubhai’ is a nickname) came from a

tiny village that is not even a dot on the political map of Gujarat. But

Chorwad, in Junagadh district, today remembers that its most famous scion.

Born on December 28, 1932 he was the progeny of a humble

schoolteacher, and that he could not go in for higher education simply

because there was no money in the family kitty.

According to Ramniklal, the eldest son, his younger brother was always

thinking of moneymaking schemes. “During the Mahashivratri Fair, Dhirubhai

got together with some friends and sold ‘Ganthia’, a Gujarati savoury, he

“Growth is Life”

Hirachand Govardhandas

Ramniklal Dhirubhai Natwarlal TrilochanabenJasumatibe

n

Anil Mukesh Dipti Nina

16


recalled. Adds a Chorwad contemporary, Dhirubhai was a familiar sight here,

cycling from village to village. All he needed was the whiff of a business

opportunity and he was off to book the orders.

As soon as Dhirubhai had matriculated, it was time to shut his books

and get to work. At the age of 17, he shipped out for the Arabian

peninsular city of Aden, to join Shell, where he learnt a lot about the

oil business. From that point onwards, his rise has been generally steady

and occasionally meteoric. Soon he graduated to clerkdom in a general

merchandising firm, A. Besse & Co, an affiliate of Burmah Shell.

The Jewish proprietor of the agency must have seen some exceptional

qualities in the young man; and by the time he was 24, Ambani was already

the general marketing manager for Burmah Shell products. Any middleclass

Indian would have been euphoric to have achieved so much success at such

a young age, and clung to the job like glue. Not Ambani. He wanted his own

business, he wanted to put to work the precepts he had picked up on the job.

For a while, he worked in a totally unrelated business-representing

people whose insurance claims had been rejected, and splitting any

settlements he was able to negotiate. At the age of 26, he returned to

India and set up a firm for exporting spices and other commodities

to Aden. Reliance Commercial Corporation, a commodity trading and export

house, was put up in 1958 at an outlay of Rs. 15,000. While the firm

specialized in ginger, cardamom, turmeric and fabrics, it was not averse to

taking on any other item.

At first, Dhirubhai could not afford an office of his own, so he

rented desk space for two hours a day. He, wife Kokilaben and four

children (two sons, two daughters, in that order) lived in a cramped two-room

flat in a crowded chawl in a Bombay slum, sharing communal lavatories.

“I remember, as children, my elder brother Mukesh and I had to share

clothes, and our only playgrounds were the gullies in the area,” recalls Anil,

the younger of the Ambani sons.



Dhirubhai has never looked back. Most top Indian corporate bosses at

the time were content to sit behind the walls of governmental protectionism

on the imports front, and earn profits from marketing frequently shoddy,

high-priced products based on obsolete technology. In contrast, Ambani

showed that he could combine the inborn shrewdness of the Gujarati

businessman with an almost American style of entrepreneurial self-

confidence and a Japanese willingness to invest in the latest technology.

For a long while, he indulged in buying and selling synthetic fibers and

textiles. “He was a small-time, paan-chewing trader, with a persuasive

manner and a razor-sharp brain for finance,” recalls Virenchee Sagar, former

Managing Director of Nirlon Chemicals and Synthetic Fibres Limited. “In the

early 1960s, he used to buy regularly from us; by the start of the 1980s, we

were buying a lot of our own raw material from him!”

Very early in his new venture, Dhirubhai picked up the art of profiting

from the Byzantine system of controls that were guaranteed to choke the

enthusiasm out of other entrepreneurs. He exported spices, and used

replenishment licenses to import rayon.

Later, when rayon began being manufactured in India, he exported

rayon and imported nylon. Still later, he exported nylon and imported

polyester. He was always a step ahead of the main competition

looking ahead and scoring bulls-eyes with most of the bold steps he

took. With the imported items being heavily in demand, his profit margins

were rarely under 300 per cent. (He admits to having made 700 per cent on

one occasion!)

“There were occasions when we exported rayon at a loss, because the

entire purpose was to get an import license for nylon,” he explains. “In this

country, it is considered fashionable to complain about government

restrictions. We took the restrictions as an opportunity. If the rules against

nylon imports had not been there, I could not have made the money!”



The heftiest profits came during the High Unit Value scheme, which the

Government introduced in 1971 through which polyester filament yarn could

be imported against the export of nylon fabrics. Reliance accounted for over

60% of exports under this scheme and was therefore, its largest beneficiary.

Once the rupees and dollars both began flowing in, Dhirubhai

decided that his sons would have the best education that money

could buy. Elder son Mukesh, who showed a technical bent of mind,

did chemical engineering, subsequently went to Stanford and

obtained an M.B.A. Anil, the younger of the boys by three years,

specialized in chemistry and then went to Wharton to secure his

master’s degree in business administration.

The strain of ceaselessly fighting corporate and political wars had

inevitably told on Ambani, and his health hit a downward curve after 1986.

That year, he had a stroke that left one side of his body partially paralyzed.

The news of his indisposition spread like wildfire in the stock market, and the

Reliance share fells like a stone in only a couple of hours’ trading. For a long

time, he did not make any public appearances, and the counter continued to

languish in the doldrums. The day he first appeared in public, the scrip made

a smart recovery.

Though not as physically hardy as before, Dhirubhai had not let the

permanent handicap of the paralytic stroke blunt the edge of his razor-sharp

brain. It was until his death that from his fourth floor office in Maker tower IV

at Nariman point all major policy decisions, which affect the future of the

Reliance group, were taken. The routine running of the organization was left

to Mukesh and Anil, who nevertheless consulted him in all key matters.





ONLY VIMAL

When the scheme ended in 1978, Ambani turned to the domestic

market. Their only difficulty was that they were not sufficiently known or

established in the domestic market. Their first priority was to establish the

brand name VIMAL. They therefore launched a crash-advertising programme,

which blazoned the mills message i.e. ONLY VIMAL and the baseline ‘A

woman expresses herself in many languages – Vimal is one of them’.

In his early days, Dhirubhai found the domestic cloth market controlled

by wholesalers who preferred to deal with established companies. So he

decided to set up his own chain of retailing stores throughout India, using the

franchising technique. For 3 years between 1977 and 1980, almost daily a

new and exclusive Vimal retail outlet would open its doors to

business. Today, Vimal textiles are sold through thousands of retail outlets,

and easily from the industry’s best-selling brand. Ambani’s success in

franchising and his speed in opening retail outlets are comparable to

that of Benetton and McDonald’s.

Ambani had been dreaming of backward integration. “My commitment

is to produce at the cheapest price and the best quality”. His desire was

motivated by lack of supply of quality fabric to the export market. The result

was a spanking new mill at Naroda with a capital cost of Rs.2, 80,000 that he

borrowed. Reliance began manufacturing activities at Naroda in 1966, with

for warp-knitting machines and a staff strength of 70.



DHIRUBHAI AMBANI: ADEN TO EDEN

“Indian stock markets and equity cult would not have been what they are but for Dhirubhai.”

In more than 40,000 years of known human history, billions of human

souls had a sojourn on this planet earth. Very few, indeed very very few of

them make a difference on the way humanity will live ever after. The few

such people have touched all aspects of our lives. What they do and achieve,

is sometimes adored, sometimes abhorred and sometimes only argued

about. But never ignored. They are the people who steadily widen the gap

between human beings and other animals.

Dhirubhai was one such person. His single most important and lasting

contribution to this nation is not the mammoth empire he created, not the

wealth he generated, not the global name for India by setting up India’s first

private sector Fortune 500 company and not his individual

entrepreneurial exploit, which nevertheless is legendary. But it is the change

he brought about in the investing culture or the way an ordinary

individual in this country invests his/ her savings. He charmed, almost like a

magician, masses and retail investors into stock markets in late 70s, 80s and

continued through the 90s. He changed for good, almost single handedly the

shape and size of stock markets.

Today, we take it for granted that there are 10 million shareholders in

this country and more and more people can be equity holders effortlessly.

But we are likely to miss the scenario that prevailed some two decades ago.

An ordinary wage earner or a trader would not think of shares any more than

he thinks of a gambling den. Stock markets and IPOs were meant only

for a handful of people either very rich or having nexus to inner coterie

that ruled the bourses.

The equity cult that he triggered and unleashed, made it possible for

thousands of entrepreneurs to raise equity funds, government to think of



getting foreign investors, stock markets to reform and get driven by

technology and so on. We cannot imagine that but for mass retail

shareholder base of Reliance, what would have been popularity,

participation, size and liquidity in the Indian stock market by 1991? Would it

have been adequate for foreign investors to respond to reforms? His

company was also the first one to raise money by way of GDRs or

innovative bonds and debentures.

One may ask how important is it to have capitalism and capital market

for general welfare in a country beset by financial scams on one hand and

religious fanaticism on the other. We just have to look into history of progress

and poverty in the last half century. There are countries like USA and South

East Asian countries (and in last two decades communist China) that

welcomed capital with an open arm and a warm hug. They did everything

that helped attracting capital. They un-did everything that could have

hurdled the inflow of capital. The resultant difference is obvious to all of us.

The resultant difference is growth and stagnation, infrastructure and

bottlenecks, prosperity and penury, high standard of living and destitution.

There is one single factor that has caused this difference. One single factor -

Capital.

Whenever we see government, be it through its Finance or

Disinvestment ministry doing anything right, that would be welcoming

capital. Whenever we see them doing anything wrong, more often than not it

is blocking capital. When we travel and see the South East Asian nations and

China, we can see huge infrastructure of roads, ports, airports, bridges,

dams, power, telecom facilities, manufacturing setups, shopping complexes

which is so strikingly ahead of that in India.

If Dhirubhai and his group have done one thing wonderfully

right, it is to raise capital. Raise capital in abundant quantity and at a

right time. It sounds a little wicked. This is tragic outcome of intoxication of

socialist values that we have been subjected to. One can do it repeatedly

only if one rewards adequately providers of capital. To do that



consistently is never an easy task. Equities or stock markets are the

wheels of the capitalism chariot and which is the only vehicle to prosperity

and progress.

In today’s global village, when one has to raise capital and be globally

competitive, one has to have a global size. Most of Indians and more so our

policy makers take small size as our destiny and in fact suffer from myopia as

well as phobia of size. He stood out as the only man in Indian business, who

had the courage to defy the thought process of all around him and had this

vision that to survive in the long run, one needs to be competitive and to be

competitive, one needs scale. “Global scale”.

Is it not incredible that a man was born with this innate vision about

secrets of growth and success, in a small village in Gujarat? Is it not

incredible that he did it in a country where bureaucracy and government are

built to thwart any enterprise or any business? Is it not incredible that the

man and his company performed with perfection in “licence raj” as well in the

last decade of reform fever? A purist can argue on ends and means, righteous

approach and spiritual heights. The fact of the matter is that we owe a lot of

capitalism, reform, equity cult, liberalization, India's stature as one of leading

equities market in the world et al, to one man - Dhirubhai Ambani, who

fought against all odds, and changed our capital markets and our lives for

good. He touched our lives like no other and many entered Eden as

he built his empire after returning from Aden.

“Share holder was his chief deity”

PRE-GLOBALISATION LICENSE RAJ

“I am willing to Salaam anyone. One thing you won’t find in me and that is ego”



Before he could build his world size plants, he had to get hundreds of

licenses. For that Ambani had to change the bureaucracy’s mindsets and

force it to review the licensing system. According to Ambani convincing the

Government meant adopting a flexible approach. “The most important

external environment is the Government of India. You have to sell your ideas

to the Government. Selling the ideas is the most important thing and for that

I will meet anybody in the Government. I am willing to Salaam anyone. One

thing you won’t find in me and that is ego”.

Ambani would spend hours educating the guardians of the

license raj. Bureaucrats needed to be convinced by number and details.

Ambani and his delegates never went to Delhi without this. They would

gather the latest status reports on what was happening in different parts of

the world in their area of interest and distribute copies of this among

influential politicians and bureaucrats. “We cannot change our rulers but

we can at least help them learn how to rule us better”, he used to tell

his executives.

Many attribute Dhirubhai’s success to political patronage rather than

proficient management. Prior to 1991 New Economic Policy, Reliance was

criticized for manipulating tariffs to suit its ends at the expense of its rivals.

To some, he became the symbol of all that is wrong in the Indian economy.

Another set of businessmen felt that Reliance was an out of control monster,

a bubble that would burst at any moment. Outwardly, Ambani appeared

unfazed by these allegations. “Controversy is the price to be paid for

success. Reliance would not have reached this level if any of the

charges were true.”

GROWTH IS LIFE

Reliance at its Best

Reliance’s most outstanding achievement has been to introduce the

equity cult to every small town in India. Fanning out to tap the rural



stock exchanges, he taught people who would have never have

thought of investing in shares, how to buy them, to track the price

movements of scrips, to deal with stock brokers and to develop the

habit of reading financial dailies and stock market newsletters. An

overwhelming majority of Reliance shareholders hold less than 100 shares

and one in 4 Indian investors owns shares in Reliance. And since then

Reliance has remained a leader in the capital markets. All its mega issues

have been successful at home as well as in international markets. Investor

confidence was reaffirmed in Dhirubhai when he declared a 1:1 bonus.

To many the Ambanis epitomize the seedy side of business, tampering

with import quotas, switching share certificates and pre-empting licenses

were some of the charges. Nevertheless, Reliance has built huge

capacities at internationally competitive costs and become a world

leader in petrochemicals. Its performance has been defying logic. Even in

a crisis-ridden market in late 1997, when the oil prices dipped to their lowest

in the decade, Reliance has managed to post a profit which was up by 25 per

cent from last year.

Investors have been largely benefited by Reliance's ability to

customize technology. Its strength lay in the way it integrated its projects.

Take the example of Reliance Textiles, which was the first Ambani company

to go public after its merger with My Nylon of T.A.Pai who had once owned

the Syndicate Bank. Considering the polyester content in Vimal fabrics, the

choice was to manufacture polyester staple fiber (PSF) and polyester filament

yarn (PFY). So in 1982 Reliance set up the PFY project at Patalganga in

Maharashtra followed by PSF capacity in 1986. Next it integrated

backwards in purified terephthalic acid (PTA) in 1986 and paraxylene (input

for PTA) in 1988. It then pocketed the detergent manufacturers by putting up

a plant to make linear alkyl benzene (LAB) in 1987.

In 1991, the company embarked on its most treasured project, at

Hazira, the largest single multi-feed ethylene cracker in the world. Hazira is a

conglomeration of many world-class plants, churning out polyethylene (PE),



polypropylene (PP), polyvinyl chloride (PVC), PFY, PSF, polyester

terephthalate (PET) and other intermediates like vinyl chloride monomer,

mono ethene glycol and pure phthalic acid (PTA). The Hazira plant is the

biggest chemical complex in India.

While this methodology helps in the economies of scale, there are

many bottlenecks such as inadequate port facilities, erratic water and power

supply and high cost. To overcome these, Reliance went on to create its own

facilities. It built its own jetties in Hazira and a single buoy mooring, 5

km off the coast, for large tankers to unload liquids directly into

storage tanks. All Reliance plants are self-sufficient in power.

In fact, the ethylene terminal at Hazira was a stunning achievement.

Before the commissioning of the cracker plant Reliance imported large

amounts of ethylene for its downstream PVC and PET plants. To transfer the

ethylene at 138 degrees it set up a cryogenic terminal in the deep sea. An

achievement Anil Ambani is proud of: "People said ethylene transfer is unsafe

and not possible in India. Once we proved that we can do it safely, the world

is copying it."

When Reliance Petroleum was building the refinery in Jamnagar, nearly

everyone thought they were over ambitious. The Ambanis had hired some

foreign consultants to know whether the project was viable. The answer they

got was a categorical no. But the family decided to go ahead despite the

negative report. Elder son Mukesh Ambani would make it a point to jet to

Jamnagar once a week after construction work started there, by his private

plane. Hital Meswani, a cousin, was posted in Jamnagar and many who

worked there say he was aware of every minute detail of the construction

process.

What’s more amazing is the speed at which the refinery was

constructed: it took all of 36 months resulting in great cost savings. The

refinery's capital cost per tonne is 30 to 50 per cent lower than that of other

refineries recently set up in Asia. The unit accounts for over 25 per cent of

India's refining capacity.



This Rs 25,000-crore integrated Jamnagar refinery complex in

Gujarat houses the world's largest greenfield project, with a capacity

to refine 27 million tonne per annum of crude. In the same complex,

Reliance has built the world's largest paraxylene project with a capacity of

1.4 million tonne per annum, a polypropylene project with a capacity of

6,00,000 tonne per annum, India's largest all-weather port, captive power

plants and all related infrastructure.

Reliance uses what is known as the 'sweat technology' whereby it

engineers milk as much as possible from the plants. To enhance output of

PTA at Patalganga, the team added a 30-tonne compressor for supplying

more air to the reactor where paraxylene gets oxidised. But the engineers

were not satisfied; only 23 tones air was being used. The team is working on

how to use the remaining seven tones!

Mega challenges excite and power the bosses of this petrochemical

giant. The common shibboleth heard in the premises of Reliance is “Dikhana

hai” (We have got to do it). Executives are encouraged to think laterally and

view business as a series of processes. Managers are given the power to take

decisions, which expands once performance is proven. The company has

relentlessly sought professionals of high class, picking the best from other

private companies, public sector and the multinationals. The mantra in

Reliance is 'owner manager'.

Reliance is also known for its financial prudence. "Reliance's

management, strategy and size are world class," says Sanjeev Prasad,

analyst, Kotak Securities. Insiders say that the company never defaults on its

payments to financial institutions. All its payments reach the institution at

2.30 p.m. sharp on the day it is required to be paid. Says a banker: "But they

never send the payments earlier."

Being a prompt borrower has helped Reliance raise funds with ease.

In 1996-97, the company raised funds worth $614 million from the



international market. Reliance is the first Asian company to issue 100-year

maturity bonds in the global markets. The bond issues were part of a strategy

to reduce its average cost of capital and increase the average maturity of its

debt. This has helped the company bring its capital cost in line with global

benchmarks.

Reliance has covered most of the criteria for competitiveness, including total

integration, state-of-the-art technology, low-cost feedstock and cheap

funding. In fact, its cost of production is among the lowest in the world. Its

capacities are so huge that once the company is totally operational it will

become one of the top five companies in the world in its product

category.

Says Brijgopal Daga, chief general manager, Unit Trust of India: "The

biggest plus point of Reliance is its size." According to him, the

company has been able to beat the vagaries of the market because of the

huge capacities. Its future looks bright with the government proposing to

increase tariffs in the petrochemical sector to stop anti-dumping. This will

help Reliance because this year, when the prices of petro products were at a

10-year low, their growth came from a 300 per cent increase in volumes.

"The smallest shift or turnaround in the cycle will give them tremendous

growth," says Daga.

But they’re some who are skeptical about this trend. Says Kotak Securities'

Sanjeev Prasad: "We are expecting an 11 per cent growth in the

petrochemical sector so Reliance may not be able to sustain this profit for

next year". But some Reliance officials feel that even if the global

petrochemical prices fall by 10-15 per cent, the high-value addition at Hazira

will insulate Reliance from such shocks.

While other corporates were involved in cutting capacities last year,

Reliance was busy adding capacities. "We believe in creating pre-

emptive capacities," says Anil Ambani, managing director. Reliance forecasts

the demand for its products to grow at 15 per cent in the coming years.



Reliance's efforts are fully focused on the domestic market. Almost 97 per

cent of its turnover comes from sales in the domestic market. "There is no

reason for them to sell outside when they have such a good demand in

India," says Tekchandani. Adds UTI's Daga: "Whatever little they could be

losing out in exports, they make good through transactions like picking up

money through GDRs."

In the money market the only time it slipped up was when it decided to

convert the triple-option convertible debentures issued in 1993 into equities,

instead of paying the investors. That was when work on its Jamnagar plant

started. This move made analysts a bit wary for two reasons: one, it bloated

the company's equity and two, a cash-shortage was perceived.

In 1995, the petrochemical oil and textile manufacturer was India’s biggest

non-government company by almost every yardstick including sales, profits,

net worth and asset base. Its market capitalization that year was Rs.96

billion. The previous year it was the only India entrant in Business Week’s list

of the 50 largest companies headquartered in developing countries.

Today, the company is a multi-division behemoth, employing more than

50,000 people at its major manufacturing centers in Naroda and Patalganga,

and using machinery that is among the most advanced in the world. The

secret of Reliance is its quick project implementation and a strong balance

sheet. And you can rely on that.



RELIANCE INFOCOMM



capacity, integrated (wireless and wireline) and convergent (voice, data and



and consulting.

Reliance Infocomm has licenses to offer telecom services in 20 circles under

the Unified Access license. In addition, it has received the Letter of Intent for

the J&K circle. This has enabled RIC to offer services across the length and

breadth of India's vast geography through its next generation fibre optic

network backbone spanning 60,000 route kms. RIC is currently offering its

wireless services in 1,100 towns and cities across India.



TEACHER IN THE FORM OF DHIRUBHAI AMBANI

What they don’t teach at Harvard ??????

The following lessons can be learnt from the life and works of Dhirubhai

Ambani

Zeal, determination and enthusiasm:

He was the one who taught the world to dream big. He knew that although he

was born in a poor family he would live a life of a rich man. He had the zeal

and enthusiasm to come up in life. The following quotes support this point:

"Meeting the deadlines is not good enough,

beating the deadlines is my expectation."

------

"If you work with determination and with perfection, success will follow."

------

"Our dreams have to be bigger. Our ambitions higher. Our commitment

deeper. And our efforts greater. This is my dream for Reliance and for

India."

------

Think big:

He was one of those very few Indians who really thought big. He

always had a dream of magnum opus. He wanted to give the customers the

best and always thought that continuos innovation was a must to survive and

grow. His plants are world scale with latest technology. Often friends used to

ask him ,”how has he achieved all that he wanted?”. His reply was , “No.

there are many miles to go”.

"Think big, think fast, think ahead. Ideas are no one's

monopoly"



Never give up attitude:

He never gave up despite many failures. He knew that failures are a part and

parcel of life. He never took failures as hurdles but took them as

opportunities. He worked towards his goals and never gave up. He often

snatched victory from the jaws of defeat.

"Don't give up, courage is my conviction."

He had a nose for opportunities:

He smelled opportunities that no other businessmen could. He attributes his

success to his uncanny knack of identifying opportunities. Competitors were

jealous by his success and felt that he was a transgressor. But he had a smart

answer to his critics – “I identifies the opportunities, you all didn’t.”

"Pursue your goals even in the face of difficulties,

and convert adversities into opportunities."

Common touch, uncommon vision:

He was the person behind the multi million group of Reliance. Without his

vision and his leadership skills the Reliance group would have been nowhere

near what it is now. He was a trailblazer and a troubleshooter. He knew that

only a great vision would take him forward.

"Growth has no limit at Reliance. I keep revising my

vision.

Only when you dream it you can do it."



Motivator and facilitator:

He was a great motivator and facilitator. He had that ability to identify

right people for the right job. He felt that all the human beings are capable of

doing a good job provided they are motivated and are given the right

environment.

"Give the youth a proper environment. Motivate

them. Extend them the support they need. Each one

of them has infinite source of energy. They will

deliver."

-------

"We bet on people."

Financial Prudence:

Dhirubhai, one could say, has virtually the Midas touch when it comes to

making money. Even in a sports sponsorship deal, where a company usually

only gains unquantifiable publicity, Reliance made a quantifiable cash profit.

In 1987, the company sponsored the World Cup cricket competition; and

thanks to some savvy marketing techniques, not only got free worldwide

publicity, but also made a profit in the manner made famous by the

organizers of the 1984 Los Angeles Olympics.

The equity cult that he created in 1979,1980,1981 and 1982 are also the

examples of his mastermind.

Employees’ Reliance on Dhirubhai:

Apart from being a financial wizard, Dhirubhai was a truly magnificent

organizer, and has been able to give his employees the impression that they

can unequivocally count on him in times of distress. For example, when an

unexpected flood hit the industrial township of Patalganga, and washed out



three entire villages on ‘Black Monday’, 24th July 1989, the human factor in

the Reliance complex there was the least badly affected, through the factory

itself was totally submerged.

More than twenty inches of rain fell in just eight hours in an area that had no

flood history in the previous 80 years. The downpour was accompanied by

winds rising to more than 80 kilometers per hour. Out of 384 people dead and

264 missing, not a single person was a Reliance employee. As many as 1,500

families were rendered homeless, and 1,15,000 people rendered destitute,

but none of these were Reliance personnel.

In space of 72 hours, Reliance bosses had mobilized more than 6,000

personnel from India and abroad to salvage the complex in which the

company had invested more than Rs. 1,500 crores. Accommodation for

affected employees was organized overnight. In spite of an ongoing transport

strike, trucks and tempos were commissioned to remove 6,000 tonnes of

debris within three days. The first two plants of the complex were restarted in

just 14 days from the date of the disaster, and the entire complex was back

on stream in a record time of 21 days.

Trusting:

Why do the investors in his companies respond so wholeheartedly to

Dhirubhai Ambani? One of the reasons is that, all through his career, he has

employed one principle that he picked up at A. Besse in Aden ‘liberally

rewarding those who have come to his assistance in times of need’.

Enormously large-hearted with those he considers his benefactors during his

days of struggle, he has been known to dole out massive sums of money

across the table without expectation of its being return.

"Between my past, the present and the future, there is one common factor:

Relationship and Trust. This is the foundation of our growth"



Ate, slept and drank only Reliance:

Dhirubhai’s commitment was to produce at the cheapest price and the best

quality. He did not give attention to anything except Reliance. He was not a

director in other companies, nor did he participate in any associations. His

whole thinking, one hundred percent of his time, from morning till evening

was about how to do better and better in Reliance.



TRANSITION FORM DHIRUBHAI TO MUKESH AND ANIL

The visionary that he was, it was only natural that Dhirubhai Ambani planned

out the succession in his group companies well in advance.

His two sons, Mukesh and Anil, have been working with the senior Ambani for

almost a decade, and both have been in decision-making positions for a long

time.

Older son Mukesh is currently designated chairman of Reliance

Industries while younger son Anil is the vice-chairman. Mukesh is also

the chairman of the group’s latest acquisition, Indian Petrochemicals

Corporation Ltd. (IPCL).

The succession has gone in accordance with the expectations of the industry

observers. Industry observers expected Mukesh to slip into the shoes of the

group chairman, while Anil was widely expected to play the role of the chief

executive. Observers tracking the company from Dhirubhai’s heydays said

the father had always banked upon Mukesh to be the visionary of the family,

while Anil, who, with his flamboyant ways effortlessly became the public face

of the group, has emerged as the nuts-and-bolts man. In addition, the

Meswani scions (Dhirubhai’s sister Trilochanaben is married into the Meswani

family), Nikhil and Hital, cousins of the Ambanis, are also directors on the

boards of the main group companies.

The two Meswanis, have played a considerable role in the growth of the

Reliance group. The two families are known to be very close and live in the

same residence in south Mumbai.



Trilochanaben’s husband, the late Lallubhai Meswani, was Dhirubhai’s closest

aide in his earlier years.

“The two brothers understand each other’s strengths. They have, in

fact, taken turns to bring their own expertise at different times in

the company’s history,” a top RIL executive told in an interview to

Business Standard after Dhirubhai’s death on the condition of anonymity.

“They are a seamless combination,” the executive said, adding, “each

brother is perfectly capable of completing a sentence started by the

other.”

Asked specifically if Anil was being groomed to handle the group’s core oil &

gas business whereas Mukesh would be in charge of the ‘new economy’

initiatives, this RIL executive said, “It is just a misconception that Anil is not

involved in telecom and other new economy businesses. It is true that

Mukesh is more hands-on in the telecom project, but Anil is equally involved.

And, when the senior Ambani was not around (in routine meetings), Mukesh

still has the last word on the group’s oil and gas issues.”

“Mukesh is the quiet type. As you would have seen, he didn’t even come out

once inside the Breach Candy Hospital (during the period Dhirubhai was

admitted). But that doesn’t mean he is out of the loop on anything. People

have started suspecting a rift between the brothers as Mukesh is

concentrating on rolling out the group’s infocom project,” this executive said.

Industry observers, reflecting on Dhirubhai’s working style, said there was

definitely a pattern in the way the group had inducted some high-flying

professionals in recent years.

These include K G Ramanathan, former chairman and managing director of

IPCL, who now heads Reliance Power; B D Khurana, formerly of the Bharti

group, who is now vice-chairman of Reliance Infocom, Alok Agarwal, formerly

of Bank of America, who has been the group treasurer for some time now,

and Firuza Parikh, who heads the biotech initiative.



ANIL V/S MUKESH Who is better?

Anil Ambani, 45years Mukesh Ambani, 47ears.

He is the marketer.

He is like the PRO of Reliance. He

has been a public figure in the

recent years for the Reliance

group. He often addresses

shareholder meetings and is the

one who faces media. He is an

extrovert.

This Wharton graduate started his

career at Reliance by managing

the textile business at Naroda and

was largely instrumental in

bringing professionalism into

Reliance.

His key skills are marketing,

financial management, networking

globally and savvy media

management.

He is the manager

This Stanford graduate started as

Dhirubhai’s troubleshooter as

after graduation he came to India

to manage Reliance and was a

helping hand to Dhirubhai.

He took care about the

Patalganga, Hazira and Jamnagar

plants’ expansion.

He has easily fitted into his

father’s shoes and has

unequivocally been chosen to

replace his father. He is now the

mentor of the group and the

Ambani family.

Both have their own qualities and it is hard to generalise that one brother is

better than another. In future what is going to matter for Reliance is

that both the brothers should put their skills to work and create a

synergy that is useful for both Reliance as a company and the two

brothers.

“The two brothers understand each other’s strengths. They have, in

fact, taken turns to bring their own expertise at different times in

the company’s history, each brother is perfectly capable of



completing a sentence started by the other.” - Top executive at

Reliance

Mukesh Ambani and his younger brother Anil (left), Chairman and Vice-

Chairman of Reliance Group of Industries, are the richest Indians according to

a Business Standard survey.

The net worth of the Ambani brothers stand at a whopping Rs 23,588

crore ($5.18 billion), up by a massive Rs 4,724 crore ($1.03 billion) since the

last year. Most of these gains have come from the 25.4 per cent rise in the

Reliance Industries stock price.

Anil and Mukesh Ambani



ANIL + MUKESH = SUCCESS

THE BIG QUESTION - WILL THERE BE A SPLIT BETWEEN AMBANI

BROTHERS IN FUTURE?

New challenges await the group. There is the telecom venture to bring to

fruition, even as the valuation of telecom as a business has changed for the

worse. There are the diversifications into relatively uncharted waters, like the

life sciences. There are new ventures to grow, like insurance. And there are

questions to be answered on whether the group will continue at the same

frenetic pace, or get more sedate. If the Ambani sons’ track record is

anything to go by, expect more rather than less.

The biggest question that is making the rounds is that will the Ambani

brothers split?

“No” says Mukesh Ambani just after becoming the Chairman of the group.

He claims that Anil is like a son to him and that he would never use his veto

power. He has scotched the speculation that the two brothers might split. He

also added “500% the brothers will stay together”.

On being asked “what would be the equation with his brother?” he said, “I

will assume the role of a father. We have to stick together. We are not a

normal business family. The things like split happen when there is no growth.

We have grown from 65 crore to 65000 crore. We have so many

opportunities that we have no time. Our ambition is limited only by time.”

He claims that his brother has one of the finest business minds in the

country.

There is also a speculation that the responsibility will be divided between the

two brothers to which he replies,” those who ask such things are ignorant of

how companies work. This not ‘pan ka dukan’ where I sit in the morning and

he sits in the afternoon.



NEW AGE COMPANIES

The Reliance spread

This year in March RIL and RPL merged to form India’s largest private

company in terms of sales.The company is now beginning to bank on new

age companies. The short profile of each of reliance’s new age companies is

given:

Financial services:

RIL holds 47% in Reliance Capital, an NBFC with a net worth of Rs. 2000

crore. RCL is involved in project financing, corporate and institutional lending,

asset management, stock broking, stock lending and depository services.

The Non-Banking Financial Services (NBFC) industry in the private sector in

India is represented by a mix of a few large companies with nationwide

presence, and a large number of small and medium sized companies with

regional focus. These NBFCs provide a variety of services including fund

based, and fee based activities, as well as cater to retail and non-retail

markets, and niche segments.

The financial sector through the last decade has undergone wide volatility

and change. During this period, effective regulations have brought in wide

ranging changes on prudential norms and continuous monitoring mechanism,

thereby improving overall industry environment. The NBFCs with high

credibility, efficiency, and customer-oriented services will dominate the

sector in future.



Business Review:

RCL continued to focus on the infrastructure projects providing immense

growth opportunities and substantial tax benefits.

Leasing:

The Company's activity in the leasing business stood at Rs. 22 crores.

Investments in the Infrastructure Sector:

RCL's investment in infrastructure sector included high growth areas of

power, telecommunications, ports etc., contributing to the overall economic

development. Your company's investment in infrastructure projects stood at

Rs. 1,238 crores.

Insurance:

During the year, RCL has taken a new strategic initiative by entering into the

life insurance and general insurance business. The company's investments in

the insurance sector stood at Rs.78 crores, and upon receipt of approval from

the Reserve Bank of India, RCL intends to invest further in this sector.

Energy:

Reliance Energy is India's leading private sector utility group, with aggregate

estimated group revenues of Rs. 7,700 crore (US$ 1.8 billion), and total

assets of Rs. 9,800 crore (US$ 2.2 billion).The group distributes nearly 16,000

million units of power to over 5 million consumers in Mumbai, Delhi, Orissa

and Goa, across an area covering 1,24,300 sq. kms.

Reliance Energy generates 941 MW of power, through its power plants

located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.

Reliance Energy is ranked amongst India's top 20 listed private companies in

terms of all major financial parameters, including assets, sales, profits and

market capitalisation. Reliance Energy is India's most valuable power

company with market capitalisation of Rs. 13,400 crore (US$ 3 billion) as of

March 31, 2004.



Reliance Infocomm :



capacity, integrated (wireless and wireline) and convergent (voice, data and



and consulting.

Reliance Infocomm has licenses to offer telecom services in 20 circles under

the Unified Access license. In addition, it has received the Letter of Intent for

the J&K circle. This has enabled RIC to offer services across the length and

breadth of India's vast geography through its next generation fibre optic

network backbone spanning 60,000 route kms. RIC is currently offering its

wireless services in 1,100 towns and cities across India.

RIC offers high-speed mobile data services though its R-World mobile portal.

This portal leverages the high-speed data capability of the next generation

CDMA 1X network. It provides 70 applications such as news, astrology, T.V.

guides, movie clips etc. and 35 games and logs more than 1 billion hits a

month.

Oil and Gas:

JVs produce crude oil and natural gas in Panna, Mukta and Tapti fields.

Awarded 12 new exploration blocks. Bidding for more.

Petrochemicals:



A world major major in polyester fibre and polyester filament yarn. In June

2002, Reliance bought a controlling stake in IPCL.

Reliance Petroleum :

RPL is the world’s largest grassroot refinery with a capacity of 27 million

tonnes. It has stake in Petronet India Ltd, set up for the creation of pipelines

all over India. Will hold 26% in the central India pipeline project which is a

1615 km. pipeline.

IPCL

Indian Petrochemicals Corporation Limited (IPCL) is a new entrant to Reliance

family, India's fastest growing and most admired private sector group

founded by a visionary entrepreneur late Mr. Dhirubhai H. Ambani. Reliance

has acquired additional 20% of equity shares from public through public offer

and now holds 46% of company's equity shares. The new board has six

members nominated by Reliance, two nominated by Government of India and

four independent members.

Indian Petrochemicals Corporation Limited (IPCL) is the pioneering

petrochemical company in India. It was established on March 22, 1969

(Chitra, Shukla Paksh 4, Saka 1891). Today, IPCL is one of the leading

petrochemical companies. It's business comprises of polymers, synthetic

fiber, fiber intermediates, solvents, surfactants, industrial chemicals,

catalysts and adsorbents. Backed by Research Center, Product Application

Centers, Technology Management Centers and Customer Relations Centres

the company is continuously innovating its processes and products. The

company owns and operates three petrochemical complexes, a naphtha

based complex at Vadodara and gas based complexes at Nagothane near



Mumbai and at Dahej on Narmada estuary in bay of Khambhat. The company

produces over one and half million tonnes of merchant products and has

turnover close to US $ three billion.



PERCEPTIONS ABOUT RELIANCE AND THE GREAT MAN

The companies and their people don’t become great only by their profit

making skills and their bottom lines. They become great when they do

something more than just making profits and enhancing bottom lines.

Dhirubhai Ambani and his company is the epitome of such people and

company. He has touched the lives of millions of shareholders, has provided

employment to thousands of Indians, has been involved in controversies with

people at Delhi and last but not the least has inspired Indians to think big and

grow in life. At the time of his death everyone was touched. He died a great

death. To know what people think about him I have incorporated perceptions

of the students and the leading corporates of India.

CORPORATE PRCEPTION

GITA PIRAMAL

The man who captured investors' imagination

What makes Dhirubhai Ambani so special? Money? Yes, he was rich, but

there are people richer than him. Power? Yes, he was powerful, but there are

people more powerful. When he decided to speak, crowds gather to hear him

though he was no orator like Atal Bihari Vajpayee. So what makes this boy-

next-door turned billionaire so special? Why does he capture our imagination

in a way no one else has in the past half century? It is a simple answer. His is

an amazing rags-to-riches story, the stuff legends are made of. Most people

are familiar with the tale but what is interesting is his mindset. Ability and

doggedness combined to turn fantasy into reality. He founded a brash

company which challenged the established groups and their way of

conducting business.



B.K.BIRLA:

Dhirubhai Ambani had an ambitious plan of converting the deserts of

Rajasthan very fertile.

This was one of the dream project plans he narrated to me two years ago in

great detail when my wife and I called upon him at his Mumbai residence.

When I asked him about his future plans, he gave me a half-an-hour lecture

on how sea water could be used to generate steam and then after use

conveyed to Rajasthan through a pipeline to make it a fertile land.

Considering his outstanding ability of enterprise, I am sure that, given a

chance, he would have transformed his dream into reality.

I rate him one of the most outstanding industrialists of the nation, for his

ability to complete projects within time as well as cost schedules. His credit

was praiseworthy, especially because he was probably the first one to install

world-class factories and plants within a predetermined timeframe.

We all prayed for his expeditious recovery but knew recovery would be

difficult. My eyes filled with tears and my heart sank at the thought that on

my next visit to Mumbai I may not have a friend to visit. It has been a great

loss.

STUDENT PERCEPTION

Mr. Naren Lath. T.Y.BMS, Raheja College

The late Mr. Dhirubhai Ambani was a man with a dream and a vision. Starting

from scratch and building a Rs. 70,000 crore company is no mean

achievement. He showed all Indians, how to go about their work with zeal,

enthusiasm and single-mindedness. And I’m sure there must be hundreds of

Indians who must have set out to start their own ventures, modelling

themselves on Dhirubhai. But how many of them succeeded?

Scores of people talk about how Dhirubhai manipulated the license-and-

permit raj and maybe, worked unethically, but all this notwithstanding, there

can be none denying the fact that he became a darling of the stock markets



and the millions of investors who held Reliance stocks and gained hugely

from the same.

The most important lesson Indians in general and students in particular have

to learn from him is the never-say-die attitude.

As one of Indian industry’s most capable sons, Dhirubhai’s life, should be

included as a part of the syllabus of business schools.

I have no doubts regarding the capability of his two sons, and am sure they

will take the company from strength to strength.

P.S.: And he must be smiling up there in the heavens as his sons have struck

gas!

Mr. Manish Chopra, TYBMS, Raheja College

Dhirubhai Ambani was synonymous with Reliance in exactly the same

manner as JRD with Tata and Rahul Bajaj with BAL. He was a colossus who

excelled in everything he did. Reliance has grown into a veritable empire

under his stewardship. From the early days of 1977 to becoming India’s only

private sector Fortune 500 company Reliance has certainly come a long way.

Such blistering growth benefited all shareholders.

Reliance is certainly the company to be relied upon. Long live Reliance, Long

live Dhirubhai.



PERFORMANCE REVIEW

1. Oil and Gas Sector

India is an energy-starved country and imports a staggering Rs 65,000

crores worth of crude oil every year, which is about two thirds of its annual

requirement. To realise Shri Dhirubhai Ambani's dream, Reliance, like in its

other businesses, created from scratch a winning combination of people,

processes, systems and technology to create a world-class exploration and

production company.

Reliance started its exploration programme straightway in deep water

and drilled its very first well at a depth of more than 2,100 feet, the first ever

for a new exploration and production company. Reliance is now drilling in

water depths of about 6,000 feet, which is the deepest ever so far

accomplished in India.Reliance has discovered natural gas in the very first

well it drilled in the deep-water block D6 in Krishna Godavari basin off Andhra

Pradesh coast.

This success comes in an aggressive schedule of 20 months from the

receipt of exploration licence. This is the first ever discovery by an Indian

private sector company. In his memory, they will be named as Dhirubhai 1, 2

and 3.This oil and gas initiative will lead to a new avenue for value creation

for shareholders. It will open enormous opportunities for economic growth

and development in India.

2. Operating Performance

Reliance performed resiliently in an environment characterized by constraints

on global economic growth, demand-supply imbalances in virtually every

sector and volatility in energy, petrochemical feedstock and product markets.

This performance was achieved on the strength of global competitiveness of

Reliance's operations, leadership in domestic markets and healthy presence

in export markets.



3. Export Performance

Reliance qualified to be reckoned as India's largest exporter. During the year

Reliance exported its products to about 100 countries. New offices were

opened in Shanghai, Ho Chi Min City, Jakarta, Jebel Ali and Istanbul. In

recognition of the company's outstanding achievement in exports, Reliance

was granted the 'Golden Super Star Trading House' status by the Directorate

General of Foreign Trade, Government of India.

4. Corporate Governance

For Reliance, Corporate Governance revolves around earning the trust of all

constituencies in how Reliance conducts its business.

This translates into attaining the highest levels of transparency,

accountability and equity, in all facets of operations, and in all interactions

with stakeholders, including shareholders, employees, government and

lenders. Reliance recognises communication as a key element in the effective

functioning of the overall corporate governance framework, and emphasises

continuous, efficient and relevant communication with all its external

constituencies

5. Social Capital

Reliance believes that building social capital is as important as building

financial capital. Reliance has placed education and health at the core of its

socially oriented initiatives. In this perspective, Reliance has supported the

creation and management of several institutions in school education, higher

education in science and technology and tertiary health care.



CONCLUSION

Reliance has grown at a dramatic pace. This achievement is not

accidental. It has been possible because of Reliance's ability to anticipate the

nature and direction of opportunities in the market place.But it is not enough

to see an opportunity. It is also necessary to leverage them. The Reliance

leadership has been able to shape businesses to harness those opportunities

in the interest of the company and its shareholders. Globalisation, new

technologies and changing demography are inexorably and continuously

changing the face and frontiers of opportunities. Unprecedented advances in

information, communication and other technologies are transforming

corporate structures and business models. Reliance has demonstrated an

unmatched ability to keep in step with these dramatic advances. This has

enabled Reliance to always remain one step ahead of times. In the process,

Reliance has raised the threshold of India's advancement.

Reliance is presently building on these strengths. It is shaping a future

that seeks to attain global leadership. This objective will be achieved not be

waiting for something providential to happen. It will be realised on the

strength of the company's capacity, competitiveness and competency.

Reliance is fortifying the depth and width of the value chain. They are

infusing operational and strategic flexibility. They are diversifying market

presence. And above all, they are getting close to the final consumer. These

elements are seminal to the Reliance architecture and will enable the

company to carve out a leadership position globally. As a result of all this,

Reliance aspires to contribute significantly to realising the dream of

transforming India into a major economic power in the 21st century.



Dhirubhai regarded himself as a Trustee acting on shareholder’s

behalf. To create value for shareholders was his religion. To give them the

best return was the mission of his life. Today, His vision is everlasting. His

values are eternal. His principles are fundamental. May God bless Reliance to

achieve the unachievable?



BIBLIOGRAPHY

Business Maharajas by Gita Piramal

Economic Times

Times of India

Business Standard

India Today

Business World

www.indiainfoline.com

www.ril.com

Business Barons


http://www.ril.com/

http://www.indiainfoline.com/

Documents

Reliance Industries