Dhirubhai…The innovator of India’s globalization-Guru reviving the spirits

Last week I saw the Movie Guru-the latest Bollywood flick directed by Mani Ratnam and casting Abhishek Bachchan and Aishwarya Rai. The Movie is quite similar to the life of Dhirubhai Ambani (Don’t forget to read the famous tussle of Dhirubhai with Ramnath Goenka of Indian Express), the founder of India’s largest corporate-Reliance Group of Industries.

I personally liked the movie very much not only for its performances only but the the time at which the movie has come with a message. Now, when everyone in the world is recognizing us a mjor contributor to the World Economy and our growth rate seems to be touching the double-digit mark soon; we are still after the MNCs and foreign companies. A lot of our talent goes drained for the foreign companies and MNCs. People don’t have DREAMS and of they have they don’t dare and some who dare also, there are lot of obstacles put in front of him be it political, social or any. Now, the next revolution can come only when these barriers can be broken and the movie says this message in the very right manner.

I personally beleive that there is no doubt Information Technology market has done a great job for India but the hardline fact is IT has only uplifted the few metropolitian Middle-Class families and have only contributed in widening the gap between the poor and the rich. The perfect example is Bangalore. From a small town in mid 1990s to a much grown metro-like structure now with bad infrastructure, pollution, badly managed and planned and most importantly, one of the top two costliest cities of the country. In this run , we forget that the real people in India is the lower middle class and the poor. Imagine the life of a peon or a labour in Bangalore- I can definitely say those who feel will definitely agree with me that we can not think our lives like that.

Its good that India is marching fast in the field of IT but its necessary to take the same initiatives in other industries also if India has to eveolve as a super-power and a developed country.

I don’t know how many people will agree with my views but I feel the movie GURU has a message in it for all of us to follow. I personally adore Dhirubhai a lot from the very beginning and therefore, would like to give a brief life biography of Dhirubhai taken from a website, http://www.indiaprofile.com/people/dhirubhaiambani.htm and then later follow it with some of his famous quotes taken from the website of Reliance Industries Limited. I feel each one of us who has a DREAM in his/her life should definitely watch this movie and if not business, atleast you can learn some basic values like Patience, Zeal, Passion and Killing attitude to how to turn his/her dream into a reality.


Born: December 28, 1932 Chorwad, Gujarat
Died: July 6, 2002 Mumbai, Maharashtra
Occupation: Industrialist
Spouse: Kokilaben Ambani
Children: Mukesh Ambani
Nina Kothari
Rags to riches is click that is often applied to describe the climb up the ladder of even modestly successful businessmen. But it could hardly be more appropriately used than to trace the meteoric rise of Dhirubhani Ambani, Chairman of high flying Reliance Industries, rated among the top three business groups in India today.

From an initial investment of a mere Rs. 15000 in 1958 to start a trading house, followed by the setting up of his own tiny manufacturing facility in Gujarat in 1966, Ambani, Son of a rural school teacher, has managed to build up a synthetic yarn, textiles and petrochemicals empire that is today the third largest private sector mega corporation.

For the year ended March 1991, Reliance Industries is understood to have recorded a sales turnover of Rs. 2,300 crores ( more than US $ 1 billion), making it the third largest private corporation in the country to day. Those who predicted that he was a conman, a confidence trickster, have had to eat their words. “ I am the dubble that burst!” chortles Dhirubhai, sarcastically referring to the negative headlines that greeted his forays into the primary capital market in the early- 1980s.

Success on such a gigantic scale inevitable excites jealousy and enmity; and Ambani, today 58, has had to deal with his share. Reliance’s have been the subject of several exposes in the press. But these have neither fazed the tycoon extraordinaire, nor halted the inexorable progress of his march forward towards his goal of becoming the undisputed No.1 in the country.

To any sort of sniping in the press, Dhirbhai has responded with stoic silence. Rarely has he reacted to even the most stringent media criticism. In the last couple of years, though, he has taken a leaf out of industrialist-cum press baron Ramnath Goenka’s book. He has taken the precaution of shoring up his own strength in the media, not minding the expenditure of huge sums of money, and timing the launches of his products to a nicety.

In late-1989, he bought a small but well-respected weekly newspaper, ‘ The Sunday Observer’, that had a combined circulation of approximately 85,000 in the up market areas of Bombay and Delhi. He converted it into the ‘Observer group of publications’, and recruited some of the country’s top financial journalists to help run it.

Today, the Observer group brings out a political and financial daily in addition to the weekend paper. Notwithstanding excellent production values, the paper is a white elephant, has limited circulation and is understood be making huge losses. Started recently is an equally slickly produced video news magazine that is becoming increasingly popular.

These tools have helped Ambani counter the adverse publicity that his group has often faced in the past for the reluctance of its big bosses to grant interviews. Even to the most powerful of journalists in the country, Dhirubhai pleads his inability to grant taped interviews. He and his sons are wiling to meet the scribes on a personal level and give them any information they desire, but on condition that it is strictly off the record.

Whether he talks to the press about his group’s working or not is a matter of the utmost indifference to lakhs of Reliance shareholders, a high percentage of them ordinary middle-class people. They all unequivocally bless the moon-faced magnate for having handed them sizable fortunes in the share market in return for loyalty to Reliance.

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 by leaps and bounds, to well over a hundred times the original investment.
Today, nearly three million people hold shares in Reliance Industries and its sister concerns. And these shareholders beget special treatment form Dhirubhai as his’ family’. He has gone to extraordinary lengths to give them a feeling of belonging. When he floated his last series of debentures, he set up a temporary force of delivery boys who handed over the certificates to each individual shareholder at his or her stated address.

In several ways, Dhirubhai is unique. He could hardly have started nearer the bottom then he did. “Please understand, to have success traditionally, you require education or money or family background; and I did not have any of these three, “he admits. “So people occasionally ask; ‘ Where did this upstart come form?’, and demand to see my credentials!”

Dhirajlal Hirachand Ambai ( ‘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- was the progeny of a humble school teacher, and that he could not go in for higher education simply because there was no money in the family kitty.

Instead, at the age of 16, he shipped out for the Arabian peninsular city of Aden, where a village acquaintance had secured him a job working for A. Beesse & Co. , a French trading firm, as a clerk at a gas station. From that point onwards, his rise has been generally steady and occasionally meteoric.

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 25, he returned to India and set up a firm for exporting spices and other commodities to Aden. Reliance Commercial Corporation was put up 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.

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 earnprofits 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 fibres 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!”

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, a children, my elder brother Mukesh and I had to share clothes, and our only playgrounds were the gullies in the area,” recalls 32 year old Anil, the younger of the Ambani, sons, who was in the limelight earlier this year because of his marriage to former film star Tina Munim.

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 licences 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 licence 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!”

Reliance began manufacturing activities at Naroda in 1966, with for warp-knitting machines and a staff strength of 70. By the time he decided to make his maiden public offer of shares in 1977, he had already gained a good reputation as a manufacturer of quality fabrics.

That first issue of 28.20 lakh shares of Rs. 10 each was oversubscribed seven times, despite the financial press shooting down the offer in its issue reviews. Today, the company is a multi-division behemoth, employing more than 50,000 people at its major manufacturing centres in Naroda and Patalganga, and using machinery that is among the most advanced in the world.
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. Today, Vimal textiles are sold through thousands of retail outlets, and easily from the industry’s best-selling brand.

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 Standford 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 experience of putting up projects in the shortest possible time so as to avoid cost and time over-runs served Mukesh in good stead when Dhirubhai purchased the latest polyster filament yarn technology from DuPont, and decided to set up a 10,000 tonnes per annum plant at a 300-acre site in Patalganga, about 65 kilometres from Bombay. DuPont would have taken two years to raise such a complex, but Mukesh, working with a small project team, completed the job in an incredible 18 months.

Going still further upstream, Reliance put up plants to manufacture purified terephthalic acid (PTA) and monoethylene glycol (MEG), both essential raw materials in the manufacture of polyster yarn. “Some time in the future,” boasts Anil the more voluble of the two sons, “We hope to integrate all the way back to natural gas!”

Dhirubhai’s ability to have finger on the political pulse of the country has quite obviously helped him slice through most of the bureaucratic red tape that has often tied Indian businessmen up in knots. Since it went public in 1977, Reliance has repeatedly infuriated competitors and customers alike by acquiring manufacturing licences to produce not only synthetic yarn and fibre, but also more and more of the raw materials used in making these products.

Other manufacturers consistently failed to get these coveted licences. In 1981, more than 400 companies applied for a licence to produce polyster filament yarn; 43 made the waiting list, but only two companies were granted the requisite permission. Reliance got a licence for 10,000 tonnes per annum while the only other licence granted was to Orkay Mills for 6,000 tpa.
Since it went public in 1977, Reliance has set several corporate records. One of these is for the growth in its assets; these have bloated by a factor of 33 times of currently top the Rs. 2,000 crores mark. No other company has grown so much, so fast.

Another record is for subscription from the investing public in a single issue. In 1985, Reliance notched the record of collecting Rs. 400 crores from an estimated 1.5 million investors through the issue of nonconvertible debentures.

That was one of its best years- a year that saw a mammoth, record crowd of over 12,000 attend its Annual General Meeting held inside a shamiana set up on the cooperage football ground, in a carnival-like atmosphere, where food packets were distributed to attending shareholders.
Subsequently, the subsecription record was broken by Larsen and Toubro, which collected well over its equity offer of Rs. 820 crores in 1989. That happened when Dhirubhai was elected chairman of the highly respected engineering colossus, and put his weight behind the media blitz that accompanied the announcement of the offer.

One of the boasts of Reliance Industries is that the level of integration it has achieved in the manufacturing process in unmatched anywhere in the world. Raw naphtha, a product refined from oil, is used to produce paraxylene, which in turn in used to produce PTA to make polyster filament yarn and staple fibre. Not only does the company use this to make fabrics which are marketed through 1,500 franchised retail outlets all over the country, but it also supplies PTA to leading textile mills throughout India.

While its manufacturing activities have made Reliance pre-eminent in its field, it is in the realm of high finance that its chief has been proven to be a forerunner. A sort of innate financial legerdemain enabled this human dynamo to manoeuvre his finances. Its innovative financial schemes gave a big boost to the capital market.

Dhibubhai turned the non-convertible debenture (NCD)-which is actually little better than a fixed deposit placed with a company-into an amazing financial tool. By announcing that these NCDs would be converted into equity shares at a premium, Dhirubhai not only sent his investors into ecstasies, but his firm also benefited hugely from the hefty premiums charged.

Legislation was finally moved in June 1989 to prevent the company from converting its fifth and sixth (the ‘E’ and ‘F’ series) issues of debentures into equity. But by then, Reliance had already made a fortune which it has wisely invested in both men and machines.

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 limited overs 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.

Apart from began a financial wizard, Dhirubhai is 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 kilometres 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 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 firs 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.
Why do the investors in his companies respond so wholeheartedly to Dhirubhai Ambani? One of the reason is that, all through his career, he ahs employed one principle that he picked up at A. Beesse in Adenlibreally 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.

At the same time, he is known to be ruthless towards his competitors. He has an elephant’s memory that easily identifies those who have crossed his path in the past.

The strain of ceaselessly fighting corporate and political wars has 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 paralysed. 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 has not let the permanent handicap of the paralytic stroke blunt the edge of his razor-sharp brain. It is still from his fourth floor office in Maker tower IV at Nariman point that all major policy decisions which affect the future of the Reliance group are taken. The routine running of the organization is left to Mukesh and Anil, who nevertheless consult him in all key matters.

There are some opinion-makers, like well-known newspaper editor Vinod Mehta, who have referred in print to Dhirubhai Ambani as ‘the embodiment of evil; However, to the Gujarati business community, he has assumed the status of demi-god. To al aspiring small-time entrepreneurs, he has become a sort of benchmark they aim at. And so, with each succeeding day, the legend to Dhirubhai Ambani continues to gather spice.


1.Growth has no limit at Reliance. I keep revising my vision. Only when you dream it you can do it.
2.Think big, think fast, think ahead. Ideas are no one’s monopoly.
3.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.
4.You do not require an invitation to make profits.
5.If you work with determination and with perfection, success will follow.
6.Pursue your goals even in the face of difficulties, and convert adversities into opportunities.
7.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.
8.Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth.
9.We bet on people.
10.Meeting the deadlines is not good enough, beating the deadlines is my expectation.
11.Don’t give up, courage is my conviction.

Well, in my opinion all of them stand true in evry sort of business as for me Business is MONEY and after all, you don’t do business for yourself only but for your family, for your friends and well-wishers, for your investers and share-holders and lakhs of employees whom you employ and finally to the society and ultimately, the country both at good and bad times. Here by good I mean like when the market is good, you contribute to the economy and people and by bad I mean during events as those of natural calamities.

Before ending I would like to end up with some of the Dialogues of the movie which I liked personally:

1. If I can do good work for a foreigner and a foreign company, then why I can;t do the same for myself.
2. Lets see a Dream and LIVE for it.
3. When people start critcizing you, you should know that you are on the right path and you are developing.
4. A DREAM when turned into REALITY, see the next DREAM much bigger.
5. Everything is fair if you are trying to get your DREAMS and believe them to be right.
6. The more you try to stop me by putting hurdles on my way, the more faster I will run.

Look the last statement carefully, it has much to say than bein a mere quote from a movie.

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