Short Essay on Dhirubhai Ambani
His Reliance Industries got a huge and because of this, he joined among the league of most successful businessmen all over the world. He went ahead and made his Reliance Industries public.
Ambani was later awarded the Padma Vibhushan in the year 2016 after his death in 2002. He was awarded the second-highest civilian honor in India for his contribution to trade and industry.
Dhirubhai Ambani was the son of Hirachand Gordhanbhai Ambani, a village school teacher belonging to Junagadh of Gujarat. He did his schooling at Bahadur Kanji School. In his youth, he joined the protests against the Nawab of Junagadh and took several actions against his actions to join Pakistan after independence. It was a testament to his leadership skills.
In the year 1948, he joined A. Besse & co. With his brother, Ramnikbhai.For this, he went to the port of Aden to work. He later came to sell shale and Burma oil products for this company. He once made a lot of money by melting rial coin and selling it as pure silver because he knew that the value of pure silver was much higher than that of the coin. Thus was the forerunner of his financial wizardry and acumen. He decided to try his hand at his business in India in the textile market in 1958.
Establishment of Reliance Industries
When Ambani returned to India and Chambaklal Damani started “Majin”(company) in partnership with his second cousin, who lived with him in Yemen. There they imported polyester yarn and export spices to Yemen. The first office of Majin was a 350 square foot room with a telephone, a table, and three chairs. Initially, he had two assistants to help him with his business. In the small office, he began to build a team consisting of Rasikbhai Meswani (his nephew), Ramnikbhai, Nathubhai (his younger brother), and two former school students, Nathbhai Muthla and Narottambhai Joshi. They usually worked around the streets of Pydhonie.
During this period, Ambani and his family lived in only a two-bedroom flat at Jai Hind Estate in Bhuleshwar, Mumbai. In 1965, Dhirubhai Ambani ended their partnership with his cousin and Ambani started on his own. He did so because the nature of both was different and there was a different talk on how to run the business in the nature of both. While Damani was a cautious trader and did not believe in creating yarn inventory, Ambani was a known risk taker and believed in building inventory to maximize profits. In the year 1966, he formed the Reliance Commercial Corporation which later became Reliance Industries on 8 May 1973. During this time he launched the brand ‘Vimal’, which sold polyester material for sarees, shawls, suits and dresses.
The extensive marketing of the brand in the interiors of India made it a household name. They started franchise business model with the nam “Only Vimal”. In 1975, a technical team from the World Bank visited the ‘Reliance Textiles’ manufacturing unit.
In 1988, Reliance Industries came out against the issue of rights regarding partially convertible debentures. It was rumored that the company is making all efforts to ensure that their share prices do not move an inch. Sensing an opportunity, The Bear Cartel, a group of Calcutta-based stock brokers, started short selling Reliance shares. To counter this, a group of stock brokers recently referred to as “Friends of Reliance”, started buying short selling shares of Reliance Industries on the Bombay Stock Exchange.
Bear Cartel was operating with the belief that the Bulls would be short of cash to complete the transaction and would be ready for settlement under the “Badla” trading system operative at the Bombay Stock Exchange. People kept buying at the price of Rs 152 per share till the day of settlement. On the day of the settlement, the Bear Cartel was put on hold when the bulls demanded physical delivery of the shares. A lot of money was provided by Dhirubhai Ambani to the stockbrokers who bought the shares of Reliance to complete the transaction. In the absence of a settlement, the Bulls demanded a refund or a penalty amount of 35 per share. With this, the demand picked up and the settlement of Reliance shares shot above Rs 180 in minutes, creating huge volatility in the market.