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hirajlal Hirachand Ambani, popularly known as Dhirubhai Ambani, one of the leading Indian businessmen was born in Chorwad, Gujarat, India. Dhirubhai was a business tycoon who built an empire worth more than 100 billion dollars from the capital of Rs.15,000 (around 370 dollars). He built an Indiaâ€™s largest private sector company and credited for creating an equity cult in the Indian capital market. Reliance is the first Indian company to feature in Forbes 500 list.
Dhirubhai Ambani was the most enterprising Indian entrepreneur. His life journey is reminiscent of the rags to riches story. He is remembered as the one who rewrote Indian corporate history and built a truly global corporate group.
His father was a school teacher. Dhirubhai Ambani started his entrepreneurial career by selling “bhajias”(kind of appetizers) to pilgrims in Mount Girnar over the weekends.
Many people consider Ambani’s phenomenal rise to be an example of crony capitalism and the result of proximity to the ruling politicians because it was achieved through preferential treatment given to him in a highly repressive business environment (the License Raj stifled Indian business until the early 1990s and only those favored by the politicians were granted licenses leaving them with no competition). Ambani took his company (Reliance) public in 1977, and by 2007 the combined fortune of the family (sons Anil & Mukesh) was 100 billion dollars, making the Ambanis one of the richest families in the world.
Needless to say, as is true of all winners, in Dhirubhai’s case too, individual qualities - an acute mind, a sense of the other, a degree of cunning, an element of ruthlessness and a large dose of gumption that is required to make the dash to victory - would have contributed to the end result in no small measure.
Work in Aden
When he was 16 years old, he moved to Aden, Yemen. Initially, Dhirubhai worked as a dispatch clerk with A. Besse & Co. Two years later A. Besse & Co. became the distributors for Shell products and Dhirubhai was promoted to manage the company’s oil-filling station at the port of Aden.
Ten years later, Dhirubai returned to India and started the Reliance Commercial Corporation with a capital of Rs. 15,000.00. The primary business of Reliance Commercial Corporation was to import polyester yarn and export spices.
Starting of equity cult in India and a stock market King
Dhirubhai Ambani is credited with starting the equity cult in India. More than 58,000 investors from various parts of India subscribed to Reliance’s IPO in 1977. Dhirubhai was able to convince people of rural Gujarat that being shareholders of his company will only bring returns to their investment.
Reliance Industries holds the distinction that it is the only Private Sector Company whose several Annual General Meetings were held in stadiums. In 1986, The Annual General Meeting of Reliance Industries was held in Cross Maidan, Mumbai and was attended by more than 35,000 shareholders and the Reliance family.
Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial returns on their investments. Ambani’s net worth was estimated at about Rs.1 billion by early 1980s.
Dhirubhai realized that he would have no financing headaches if he could earn the trust of investors, and he took care to ensure that the investor earned a decent return, not only by way of dividends, but by continuous appreciation of the Reliance scrip. He was a man who always dreamed big. At a time when capacities were fragmented and small, Dhirubhai dared to dream big. Instead of setting up capacities that would cater to current demand, he set up the capacity and then set about creating the demand. He knew where latent demand existed and decided to supply it. He made no compromises on quality, insisting that his machinery must be state-of-the-art.
Dhirubhai Ambani was admitted to the Breach Candy Hospital in Mumbai on June 24, 2002 after he suffered a major “brain stroke”. This was his second stroke; the first one had occurred in February 1986 and had kept his right hand paralyzed. He was in a state of coma for more than a week. A battery of doctors was unable to save his life. He breathed his last on July 6, 2002, at around 11:50 P.M. (Indian Standard Time).
His funeral procession was not only attended by business people, politicians and celebrities but also by thousands of ordinary people. His elder son, Mukesh Ambani, performed the last rites as per Hindu traditions. He was cremated at the Chandanwadi Crematorium in Mumbai at around 4:30 PM (Indian Standard Time) on July 7, 2002.
Dhirubhai Ambani started his long journey in Bombay from the Mulji-Jetha Textile Market, where he started as a small-trader. As a mark of respect to this great businessman, â€˜The Mumbai Textile Merchants’ decided to keep the market closed on July 8, 2002. At the time of Dhirubhai’s death, Reliance Group had a gross turnover of Rs. 75,000 Crore or USD $ 15 Billion. In 1976-77, the Reliance group had an annual turnover of Rs 70 crore and Dhirubhai had started the business with Rs.15,000.