RELIANCE

May 8, 2007 – 5:26 pm

RELIANCE

The Orgin Of Reliance Group

The Orgin Of Reliance Group

The Orgin Of Reliance Group

The Times of India reported on 5th May that [[Reliance]] Mutual Fund has kept its position as India’s largest fund house with assets crossing INR 48,000 crores. Reliance has the distinction of being the first Indian company to be named among the five hundred listed in Forbes.  How did all this come about? Let us dig into the rags to riches story of Reliance. The one name associated with it from its foundations is Dhirubhai Ambani.
 
What is Reliance? The Reliance Group is India’s largest business house with total revenues being more than $22.6 billion. This is equal to 3.5% of India’s GDP. Reliance contributes to 10% of India’s total indirect tax and 6% of her total exports. Reliance network of exports spread out to more than one hundred countries across the globe. 
What are the activities of Reliance?  It is involved in oil exploration and production, gas refining and marketing, petrochemicals, textiles, financial services, insurance, power, telecommunications and infocom initiatives. 
The names of Reliance and Dhirubhai Ambani go hand in hand. He was born on 28th December 1932, in Chorwad, Gujarat. He belonged to the Hindu Modh Bania community. Dhirubhai built India’s largest private sector empire, Reliance, and created an equity cult. His father was a schoolteacher. Dhirubhai started off by selling fried snacks to pilgrims in Mount Girnar during weekends. After school he became a dispatch clerk at A.Besse & Company. The latter became distributors of Shell and Dhirubhai was sent to manage an oil filling station at Aden. For sometime he also worked in Dubai. In 1958 he returned to India with INR 50,000/- in his pocket. With this he set up a textile trading company. 
This was the first chapter of the story of Reliance. Aptly helped by his wife and two sons Dhirubhai diversified his interests to petrochemicals, telecommunications and information, technology, energy, power, finance, capital markets and logistics. Reliance gave new dimensions to India’s equity culture. Till then the market had been dominated by financial institutions but with Reliance coming into the picture thousands of retail investors jumped into the fray by putting their trust in the name of Reliance. With innovative instruments like convertible debentures from the 1980’s Reliance became a hot favorite in the Stock Market. Reliance was the pioneer Indian company to raise funds in the international markets. Only India’s sovereign rating restricted its high credit taking in international markets.
The Federation of Indian Chambers of Commerce and Industry named Dhirubhai Ambani of Reliance The Indian Entrepreneur of the 20th century. The Times of India conducted a poll in which he was acclaimed to be the greatest creator of wealth in the 20th century. 
Thus we see that Reliance Industries Ltd was the brainchild and product of the labors of Indian business tycoon, Dhirubhai Ambani alias Dhirajlal Hirachand Ambani.
The story of Reliance makes fascinating reading. During the 1950’s the administrators of Yemen discovered that a lot of their currency, the Rial, was disappearing through Aden because of a young man placing unlimited buy orders for Rials. The Rials, at that time, were made of pure silver and was greatly in demand in the London Bullion Exchange. Dhirubhai bought and melted the Rials and sold it to the London bullion traders. Within three months his work came to a halt but by that time he had made few lacs. 
In the 60’s Dhirubhai returned to India and started Reliance Commercial Corporation with a humble capital. The business was related to the import of polyester yarn and export of spices. 
The first address of Reliance was in Narsinathan Street in Masjid Bunder – a small 350 sq ft joint with a telephone, table and three chairs and only two assistants. The family too managed in a one room flat. 
The fortunes of Reliance soon began to change. In 1966 the first textile mill was set up at Naroda using polyester fibre. He branded his products Vimal and thanks to intensive marketing, Vimal became a household name. Financial retail outlets were set up where only Vimal brands were sold.  In 1975 a visiting World Bank team certified it to be excellent even by the standards of the developed world. 
The next step of Reliance was to enter the equity world. An equity cult came to be created. Nearly 60,000 investors from all parts of India placed their trust in Reliance IPO in 1977. Rural India and first time investors learnt to place its trust and money in the name of Reliance.
In 1982 Reliance Industries came up against a rights issue about partly convertible debentures. It was rumored that Reliance was making all efforts to see that their stock prices did not fall by even an inch. Ready to strike, a Bear cartel consisting of a group of stockbrokers from Calcutta began to short sell Reliance shares. Another group, friendly towards Reliance began to buy the short sold shares on the Bombay Exchange. The Bears were confident that the Bulls would soon run out of cash and be prepared for an understanding under the ‘badla’-trading scheme prevalent in the Bombay Stock during that time. But the tables came to be turned in favor of Reliance. Dhirubhai himself provided the required cash when the Bulls demanded a physical delivery of shares. The net result was that Reliance shares shot up from INR 152/- to 180/- within a few minutes. The market was in uproar with Dhirubhai as the uncrowned king. The Bombay Stock Exchange came to be closed for three full days. Authorities intervened and brought down the unbadla rate to 2/- with a ruling that the Bear cartel would have to deliver the shares within the next few days. The Bears bought Reliance shares from the market at higher price levels and most probably Dhirubhai himself supplied these shares and earned a healthy profit from the great adventure. 
Questions naturally arose around Reliance. How could a yarn trader within a few years cough up such huge amounts of cash during a crisis? Parliament began to face queries. The Finance Minister gave the information that a non-resident Indian had invested nearly 220/- million INR in Reliance from 1982/83. These had been channelized through many companies – all registered in the Isle of Man. The peculiarity was that all the owners had the common surname or Shah. However, Reserve Bank investigations did not find anything wrong done by Reliance and its friends.
Keeping its core in petrochemicals – Reliance soon diversified its activities to telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets and logistics. BBC described it as ‘a business empire with an estimated annual turnover of $12bn, and an 85,000- strong workforce’. Reliance has the distinction of being the only public limited company whose many annual general meetings had to be held in stadiums with more than 350,000 shareholders in attendance.
Success creates jealousy. Reliance had to suffer its share. Nusli Wadia of Bombay Dyeing group was once the biggest competitor of Reliance. Wadia was known for his clout in political circles during the time when the economy had not been liberalized. Competition took an ugly turn when during the seventies Wadia got a permission from the then Janata Party ruled government to build a DMT (Dimethyl Terephthalate) plant. Then Ramnath Goenka of Indian Express turned his pen against Reliance. It seemed that Goenka was using a national newspaper for his own personal vendetta. But despite everything people did not lose faith in Reliance. Reliance ran into rough weather also with the V.P.Singh government. The license for importing Purified Terephthalic Acid was cancelled. This was essential as a raw material for manufacturing polyester yarn.
The first stroke had paralyzed Dhirubhai but the second stroke spelt out the death sentence for him. He died in 2nd July 2002 leaving behind at the helm of Reliance his two sons Mukesh and Anil, wife and two daughters. His funeral was attended not only by big business and politicians but also by thousands of ordinary folks. He is an example of what a common person can do to help himself as well as the economy of his country. 
At the time of his death the Reliance group had a gross turn over of INR 75,000 crores from 70 crores in 1976/77. In 20003 Government of India issued a postal stamp (denomination 5/- INR) in Dhirubhai’s honour. 
Reliance began to flow through two channels after the death of Dhirubhai. Differences broke out between his two sons over ownership issues as well as private matters. It was expressed that this would have no impact on the functioning of the company – it being a company managed aggressively by professionals. This is of great importance to the Indian economy as a whole. The wife of Dhirubhai, Kokilaben mediated for her sons.
Mukesh was awarded Reliance Industries and IPCL and this group came to be known, as Reliance Industries Ltd. Anil became head of Infocomm, Reliance Energy and Reliance Capital known as the Anil Dhirubhai Ambani Group (ADAG). 
The pages of the book called Reliance thus continue to be written as it meanders through Time.
  
 

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  1. 59 Responses to “RELIANCE”

  2. hi
    This story definetly will give confident to who wants to become an entreprenuer in his life. I got confidence and i left my fear to start up a business, and also Ambani’s courage affected my heart
    Thank you

    By selvamagan on Oct 31, 2007

  3. Be brother again like great sons to u r father.put his name top in the list who had good sons.

    By Hi, its vgreat ambani on Aug 18, 2008

  4. Ambani has amazing personality. He is legend. He is a icon. No one do the achievement within a life time. He is a history. I always thinking about Ambani when I started to hear about him. from that day i am studying about his life. I have seen the film GURU which picturized well about his life story. I am comparing every one bisiness man, Actors, politicians even ordinary person…. no one comparable with Ambani. very few only can do these kind of achievements. Always i am trying to do business but many hardships i faced but I never tiered, because my role model, my idol is Dhirubai Ambani… THE LEGEND

    By Rukmangathan on Sep 12, 2008

  5. i love ambani brothers i want to work with them

    By mukesh saini on Oct 15, 2008

  6. I am a big admirer of Sir Dhirajlal. And am willing to work somewhat on his lines. I m also a budding entrepreneur, but I have my own ways of doing it. However, I would pay tribute to him, to teach us, that this is possible and don’t just sit there and read, but learn and work.

    By Sayantan Nandi on Dec 12, 2008

  7. ambani very good person.always doing good good thing.i like very lot much.gr8 bisiness man.
    lovely english right?!!
    sounds like most of the noobs on top!!
    peace out brothers!

    By Moonfang on Jan 3, 2009

  8. Very worst stories and very best peoples in doing bussyniss i like them too much little only ma.Yoda selvamagan style baby!!!

    By Espada4 on Jan 3, 2009

  9. This article is purely helpful to every person who want to suceed not only in business but also in life.

    By shameema on Jan 6, 2009

  10. THIS STORY PROOFS THAT TALENT DOES NOT RECQUIRE A CERTIFICATE. IT IS A PROPERTY OF THOSE WHO PROVE THEMSELVES, AND THEY CANNOT BE STOPPED AT ALL….!!

    By VIKAS SINGH on Feb 21, 2009

  11. Dhiruji is a pride of our indian corporate world . He is inspiration to us be a best entrapreneur.

    By Shantesh Jattimath. on Mar 14, 2009

  12. country proud s on ambanis……..

    By RAHUL GUPTA on Mar 17, 2009

  13. heyy dis story is inspiring……………….

    By raja on Jun 27, 2009

  14. hi
    ambani brother

    you are very smart worker.

    By chakresh awasthi on Jul 13, 2009

  15. u very good businessman

    By firoz on Aug 27, 2009

  16. Good. Keep Moving…….

    By Vinothkumar.M on Sep 8, 2009

  17. with concentrating on a perticular aim and with hard labour one can achieve anything thats clear from ambani groups,

    By pravanjan on Sep 16, 2009

  18. I HAVE NEED

    By vaibhav on Oct 2, 2009

  19. A very very good business nd very good motivater 4 everyone who want to sucess

    By Aakash jain on Oct 12, 2009

  20. hello ,after going thru this motivational n hardship story of reliance i build a confidence that i can also start my own business ,necessary is of my hard work n confidence

    thanks

    By jyoti pandita MBA student on Nov 12, 2009

  21. iam doing project work on dhirubhai ambani i need all information regarding reliance history,how is it related to the customers

    By feroz shaik on Dec 13, 2009

  22. what a man…Anil D. Ambani

    By BOSS on Dec 30, 2009

  23. what a man…Anil D. Ambani (all proud to him only)

    By BOSS on Dec 30, 2009

  24. Mr Ambani was not only a buisnessman but also he was a son of the country. His commendble job might have paralyised him but has given Indian economy limbs to grow and prosper . He is in true sense a work machine .may his soul rest in peace . And reliance makes india the biggest e26nmy.

    By Vivek mishra on Jan 23, 2010

  25. hi
    This story definetly will give confident to who wants to become an entreprenuer in his life. I got confidence and i left my fear to start up a business, and also Ambani’s courage affected my heart
    Thank you

    By Ravish Raj Porwal on Feb 4, 2010

  26. HAI I FEEL THAT YOU ARE MY ROLE MODEL.

    By R.RAJA on Feb 19, 2010

  27. it’s really give a lot of inner energy to do something new in out live. i am also appreciate by this and try to do best in my life……………

    By vikaram singh saini on Feb 20, 2010

  28. you are the initiator of your business, and you research and hard work in our field thatswhy you success, but education system much poor. we learn only success person in india. meanse we want to do existing business or work. not want to thing new business or initiative. as you know no one can make a kapil dev or dirubai ambani ji so just remember only and do new things for the better ment of country

    By sarvjeet singh on May 27, 2010

  29. Ambani, the best enterprenuer of the india has flagged our nation in “INTERNATIONAL ECONOMY”. His life is totaly devoted to his Business & realy we are Proud to him.

    By HARISH GULHANE on Jul 29, 2010

  30. Hello every1 i will give you just 1 comment on this great personality that he means Mr. Dhirubhai ambani is called as a god of business.And i want 2 know that how did you choose your empires name i.e RELIANCE.

    By YASH SHAH on Jul 31, 2010

  31. he is great

    By vipin on Aug 5, 2010

  32. D.Ambani’ great person in india , who give the great move in indian structure , and effect the indian Economy. i want establish the bussiness but in future my competitor is AMBANI GROUP , THAT’S MY CHALLENGE………………….

    By pushpendra bhardwaj on Aug 6, 2010

  33. its a good company which is helpfull for thousand of indian talented people.its is the rollmodel of many of the dreammaker.

    By nitin singh on Aug 29, 2010

  34. hi
    This story definetly will give confident to who wants to become an entreprenuer in his life. I got confidence and i left my fear to start up a business, and also Ambani’s courage affected my heart
    Thank you

    By Rahul Jain on Sep 6, 2010

  35. this really inspire us to get top position

    By KRISHNA on Sep 14, 2010

  36. I am really impressed by the life story of Dhirubhai Ambani. He is my role model

    By Hina Sharma on Sep 16, 2010

  37. i really apriciate Mr. Anil Ambani n his two sons for their achievements. this people motivate us to do hardwork n feel confident about ownself. its inspiring. India’s pride………Late Anil Ambani.

    By Rupshikha das bharali on Sep 23, 2010

  38. Hard work & right decision works

    By Siddhi Ambokar on Sep 25, 2010

  39. Thanks for the giving the information about the great business magnet…. i hope he’s an example for each and every business people’s in the world…. please display the latest information about the Ambani’s group…. i’m once again thanking you

    By Pugaz on Oct 14, 2010

  40. I am really impressed by the life story of Dhirubhai Ambani Thanks for the details

    By Rahul N on Oct 18, 2010

  41. dhirubhai ambani,the legend ,the king,the bst bussiness man…….he is really a great personality,man wth a full business mind……i m vry much inspired wth his story…..his story gives comfidence…..we r really lucky to have such personality in india..who took indian industries at global level…

    By rohit walia on Oct 19, 2010

  42. hello g. apda styal ok hai.

    By upkar on Oct 21, 2010

  43. sir i do respect you very much.you inspired me during my strgulingdays.my strugul yet had not end and it wl b contituned but u had lighted path to me.i am not much more educated so if i had any mistake please i beg mercy.i was alone on my strguingdays like u.if u give reply or talk i wl b grateful to you.MADHUMITA BHATTACHARJEE.

    By madhumita bhattacharjee astrologer on Dec 7, 2010

  44. i like ambani group. i want to work with ambani group…… :lol:

    By johit kumar on Feb 9, 2011

  45. I Like RELIANCE.

    By supriya on Feb 18, 2011

  46. i like Ddhiru bhai ambani and his personality becouse of his business strategy and success of his life

    By Abhaya patra on Feb 27, 2011

  47. Thanks for sharing this information.
    I liked this post very much,truly time changed these guys to top position.
    I couldn’t believe it…………….

    By Zaheen on Mar 14, 2011

  48. dhirubhai is a legendary industrialist after tatas and birlas

    By teja on Apr 10, 2011

  49. i want to see reliance the biggest company of the world.

    By mukesh on Apr 20, 2011

  50. nice to learn about reliance’s upcoming….the uprising never stops ..and next empire in world history is going to rise,,,,as its my dream to set up R & M group of industries till my lifetime…iaccept that i m not financially strong and comptition in todzays market is at peaks but its the will power ,hard work and god gifted minds together which will help me through it…i also wish others having similar dreams and thinking like me to contact and come together as as much united we are strongr we will be..aall the best to me and alll for rdeams 2 come true
    ph:9452392169

    By PRAGYANAND MAURYA on Apr 23, 2011

  51. I WANT TO BE A BUSSINESS MANAGER OF YOUR COMPANY

    By anurag soni on Jul 8, 2011

  52. i very insipre with this company.and i pray to god that this company is to be no. One company of the world.i also like to be a done a small part of work of company.and also be a sucess person like ambani group.
    Best wish
    barun kumar ca student

    By barun kumar on Jul 27, 2011

  53. Every one wants to be this . but life give
    opportunity to some people who deserve it .

    By Vivek kumar on Aug 13, 2011

  54. i inspired of this story . realy dhirubhai ambani was great personalty.every youth can learn of this story.he is the rolemodal.i also budding entrepreneur.

    By Ram Pandey on Aug 20, 2011

  55. Is the reliance group still a family corporation?

    please respond.. after the split up of the is the reliance industries ltd and anil group is it still a fmily corp.?

    By Krissia binungcal on Aug 21, 2011

  56. I think that it is always very hard to start a company like a reliance.But I proud to say that my father start a company of textile industries
    not like big and big company like reliance but I expect a company who was a competitor in future.

    By Sahil Rathore on Sep 29, 2011

  57. Amazing to read, No words to say Thanks for the information

    By Srikanth on Oct 21, 2011

  58. i want to see reliance the biggest company of the world.
    and i wants to meet aneel ambani sir.

    By rafik shaikh on Nov 16, 2011

  59. Only when you can dream it, you can do it.”

    Dhirubhai Ambani. wards

    By rafik shaikh on Nov 16, 2011

  60. i wantto work with reliance co. i am very motivate by D.B.Ambani thoughts.

    By sandip Ahire on Feb 22, 2012

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