Many Indian Business leaders inspire and motivate young entrepreneurs in the country. It is important to aspire these business leaders, how they started their business and what are their decisions which made them successful and what they learnt and had their growth from their failures. One among them is Reliance Industries Limited.
Dhirubhai Ambani (28 December 1932 – 6 July 2002) was an Indian business tycoon who founded Reliance Industries. Ambani started his business in 1973 and took Reliance public in 1977 and was worth 25.6 billion dollar upon his death on 6 July 2002. In 2016, he was honoured with the Padma Vibhushan, India’s second highest civilian honour for his contributions to trade and industry.
Ambani lived in Europe and returned to India and started “Majin” in partnership with his Chambaklal Damani, who lived with him in Yemen. Majin was to import polyester yarn and export spices to Yemen. They set up their first office of the Reliance Commercial Corporation at the Narsinatha Street in Masjid Bunder. It was a small room with a telephone, one table and three chairs. Initially, they had two assistants to help them with their business. At the tiny office, he began to make a team that would stay with Reliance for years. They usually worked around the streets of Pydhonie.
During this period, Ambani and his family stayed in a two-bedroom apartment at the Jai Hind Estate in Bhuleshwar, Mumbai. In 1965, Champaklal Damani and Dhirubhai Ambani ended their partnership and Ambani started on his own. It is believed that both had different opinions and a different take on how to lead the business. While Damani was a cautious trader and did not believe in building yarn inventories, Ambani was a known risk-taker and believed in building inventories to increase profit. In 1966 he formed Reliance Commercial Corporation which later became Reliance Industries on 08 May 1973. He launched the brand ‘ Vimal ‘during this time which sold polyester materials for saris, shawls, suits and dresses.
Today the Reliance’s extensive marketing of the brand in the interiors of India made it a household name. Franchise retail outlets were started and they sold the “Only Vimal” brand of textiles. In the year 1975, a technical team from the World Bank visited the ‘Reliance Textiles’ Manufacturing unit.
The company was co-founded by Dhirubhai Ambani and Champaklal Damani in 1960’s as Reliance Commercial Corporation. In 1965, the partnership ended and Dhirubhai continued the polyester business of the firm. In 1966, Reliance Textiles Engineers Pvt. Ltd. was incorporated in Maharashtra. It established a synthetic fabrics mill in the same year at Naroda in Gujarat. On 8 May 1973, it became Reliance Industries Limited. In 1975, the company expanded its business into textiles, with “Vimal” becoming its major brand in later years. The company held its Initial public offering (IPO) in 1977. The issue was over-subscribed by seven times. In 1979, a textiles company Sidhpur Mills was amalgamated with the company. In 1980, the company expanded its polyester yarn business by setting up a Polyester Filament Yarn Plant in Patalganga, Raigad, Maharashtra with a financial and technical collaboration with one of the American Company.
In 1985, the name of the company was changed from Reliance Textiles Industries Ltd. to Reliance Industries Ltd. During the years 1985 to 1992, the company expanded its installed capacity for producing polyester yarn by over 145,000 tonnes per annum. The Hazira petrochemical plant was commissioned in 1991–92.
In 1993, Reliance turned to the overseas capital markets for funds through a global depositary issue of Reliance Petroleum. In 1996, it became the first private sector company in India to be rated by international credit rating agencies. S&P(Standard and Poor) rated Reliance “BB+, stable outlook, constrained by the sovereign ceiling”. Moody’s rated “Baa3, Investment grade, constrained by the sovereign ceiling”.
In 1995/96, the company entered the telecom industry through a joint venture with NYNEX, USA and promoted Reliance Telecom Private Limited in India.
In 1998/99, RIL introduced packaged LPG in 15 kg cylinders under the brand name Reliance Gas. The years 1998–2000 saw the construction of the integrated petrochemical complex at Jamnagar in Gujarat, the largest refinery in the world.
In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India’s two largest companies in terms of all major financial parameters. In 2001–02, Reliance Petroleum was merged with Reliance Industries. In 2002, Reliance announced India’s biggest gas discovery at the Krishna Godavari basin, in nearly three decades and one of the largest gas discoveries in the world during 2002. The in-place volume of natural gas was in excess of 7 trillion cubic feet, equivalent to about 1.2 billion barrels of crude oil. This was the first ever discovery by an Indian private sector company.
In 2002–03, RIL purchased a majority stake in Indian Petrochemicals Corporation Ltd. (IPCL), India’s second largest petrochemicals company, from the government of India. IPCL was later merged with RIL in 2008.
In 2005 and 2006, the company reorganized its business by demerging its investments in power generation and distribution, financial services and telecommunication services into four separate entities.
In 2006, Reliance entered the organised retail market in India with the launch of its retail store format under the brand name of ‘Reliance Fresh’. By the end of 2008, Reliance retail had close to 600 stores across 57 cities in India.
In November 2009, Reliance Industries issued 1:1 bonus shares to its shareholders.
In 2010, Reliance entered the broadband services market with the acquisition of Infotel Broadband Services Limited, which was the only successful bidder for pan-India fourth-generation (4G) spectrum auction held by the government of India.
In the same year, Reliance and BP announced a partnership in the oil and gas business. BP took a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the KG-D6 block for $7.2 billion. Reliance also formed a 50:50 joint venture with BP for sourcing and marketing of gas in India. In 2017, RIL set up a joint venture with Russian Company Sibur for setting up a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018.
Today, Reliance is a well-known company in India, and led by his son Mukesh Ambani, the company operates a broad collection of businesses, each of which is growing at amazing rates. The company’s tagline is “Growth is Life,” and this is truly the way Reliance operates.
In 2019 the company generated $89 billion in revenues, a 44% increase from the prior year, with profits around $5.6 billion (13% year over year increase). If you look at analyst projections for the company, one expects the company to grow to $124 billion in revenue by 2024. Well, the story of Reliance is the story of India: as the Indian economy evolves, Reliance is there to accelerate growth. In fact Reliance’s most exciting business, Jio (the 4G telecom company that provides an entire range of services for digital life), has the potential to be one of the largest telecommunications companies in the world. This is a company that thrives on smart ideas, bold stakes, and investment in people. And when all these three things come together well, we find a company with unstoppable power to grow.
The leadership team understands the need to build a flattened, highly empowered organization, and they have experimented with this year after year. Today, the Jio business has been designed around a “fractal” organization model – one which empowers thousands of local sales and service teams to reach into Indian markets with a “one-stop” service for all products.
As far as bold stakes, Reliance has built the world’s largest and most multi-functional refinery in the world. The company has dug a deepwater oil well, the first in India. And at the time Jio was conceived, built the largest 5G network in the world. These “big stakes” come from the Chairman and his leadership team, and they don’t just bet, they bet smart. They spend lots of time thinking, studying, and researching how to make these bets work, and then with engineering precision (the top executives are engineers) they launch, repeat, improve, and grow.
In the area of investments in people, Reliance takes every aspect of Human Resources and management seriously. While the company is a demanding, hard-working place, the leadership team is constantly looking at new approaches to pay, goal-setting, rewards, and benefits. Reliance has been implementing OKR’s (a form of goals), agile team-based management, and continuous learning.
“Our dreams have to be bigger, our ambition higher, our commitment deeper and our efforts greater. This is my dream for Reliance and for India” said Dhirubhai Ambani Dhirubhai. He built an empire that is rock solid and he will always remain an icon and inspirational business leader. He was a perfect combination of entrepreneurship and leadership. He started his business from a small textile mill and through his leadership skills he helped Reliance Industries to reach new heights. He had all the qualities of a good leader. Though he was not highly qualified, but the leadership skills for engaging employees were inbuilt in him. He was a natural leader. He had a great vision, mission, ambition, zeal and commitment. His sons, Mukesh Ambani and Anil Ambani, also exhibit the same qualities inherited by him.
There are many leadership qualities of Ambani which moves me. But some of them are his revolutionary ideas to change the future, silent kindness, believe in teamwork and calculated risk.
Dhirubhai Ambani believed in the concept that ‘more the supply, more will be the demand’. However, this also meant a huge investment. Inspite of the fact that this concept was based on years of observing and researching the market, it was his gut instinct and risk taking ability which took him where every entrepreneur dreams to be. When you take risk, and give your best there is always the best outcome of it.
One of the remarkable traits of Ambani was that whenever he helped someone, whether that was part of the business or it was a personal level, he never spoke about it to anyone. Many business leaders do philanthropy for the sake of public relations, but with Amabani as time passed people got to know and this helped to build confidence in anything related to him.
Innovation and moving from one level to an other and opening varieties of firm are crucial for any entrepreneur to nurture their business. But Ambani handlesd it well. The hunger to change and expand made Dhirubhai Ambani grow shockingly. His efforts in various fields have not only benefitted him but also the nation and its people. A determined push for change can bring about positive developments not only in your business but for everyone connected to you as well.