“Dhirubhai Ambani: The Visionary Entrepreneur Who Revolutionized Indian Business”

Dhirubhai Hirachand “Dhirubhai” Ambani (28 December 1932 – 6 July 2002) was an Indian billionaire businessman and the founder of Reliance Industries, which he established in 1958. He made Reliance a publicly traded company in 1977. In 2016, Dhirubhai Ambani was posthumously awarded the Padma Vibhushan, India’s second-highest civilian award, for his significant contributions to business and industry. Despite his success, he faced several allegations, including market manipulation, tax evasion, and cronyism.

Early career

Dhirubhai Ambani was born on 28 December 1932 in Chorwad, Malia Taluka, Junagadh district, Gujarat, to Hirachand Gordhanbhai Ambani, a village school teacher, and Jamnaben Ambani. He belonged to the Modh Vaniya (Baniya) community. Dhirubhai attended Bahadur Khanji School for his education. In 1958, he returned to India from Aden to start his own business in the textile industry. He also worked at a petrol station as a fuel vendor early in his career.

Founding of Reliance Industries

After returning to India, Dhirubhai Ambani started a business called “Majin” in partnership with his second cousin, Champaklal Damani, who had lived with him in Yemen. Majin’s goal was to import polyester yarn and export spices to Yemen.

The first office of Reliance Commercial Corporation was set up on Narsinatha Street in Masjid Bunder, Mumbai. The office was a small 350 sq ft (33 m²) room with a telephone, one table, and three chairs. They had two assistants to help with the business.

At that time, Dhirubhai and his family lived in a two-bedroom apartment at Jai Hind Estate in Bhuleshwar, Mumbai. 1965, Dhirubhai and Champaklal Damani ended their partnership due to differing business ideas and temperaments. Dhirubhai then continued the business on his own.

Controversies

Allegation of market manipulation

In 1988, Reliance Industries faced a major challenge involving a rights issue of partly convertible debentures. Rumors suggested the company was working hard to maintain its stock prices. Taking advantage of the situation, a group of stockbrokers known as the Bear Cartel from Calcutta began short-selling Reliance shares. In response, a group of stockbrokers, later called “Friends of Reliance,” started buying these shares on the Bombay Stock Exchange (BSE) to counter the Bear Cartel’s moves.

The situation escalated, leading to a temporary closure of the Bombay Stock Exchange for three days. To resolve the crisis, BSE authorities reduced the “Unbadla” rate to ₹2 and required the Bear Cartel to deliver the shares within a few days. As a result, the Bear Cartel had to buy Reliance shares at higher prices. It was also revealed that Dhirubhai Ambani supplied these shares to the Bear Cartel, earning significant profits from the incident.

The event sparked widespread questions and scrutiny. Critics and the media wondered how a former yarn trader like Ambani managed such a large cash flow during a financial crisis. The then Finance Minister, Pranab Mukherjee, addressed this in Parliament, explaining that Non-Resident Indians had invested ₹220 million in Reliance during 1982–83. These investments were made through companies registered in the Isle of Man, such as Crocodile, Lota, and Fiasco, all owned by individuals with the surname Shah.

An investigation by the Reserve Bank of India found no evidence of unethical or illegal activities by Reliance or its promoters, clearing them of any wrongdoing.

Death

On 24 June 2002, Dhirubhai Ambani was admitted to Breach Candy Hospital in Mumbai after suffering a severe stroke. This was his second stroke; the first one, in February 1986, had left his right hand paralyzed. He remained in a coma for over a week despite consultations with several doctors. Sadly, he passed away on 6 July 2002 at the age of 69.

India has lost a shining example of how an ordinary individual, fueled by determination and an entrepreneurial spirit, can achieve extraordinary success in a lifetime.

–  Atal Bihari Vajpayee, former Prime Minister of India

For over three decades, Dhirubhai Ambani shone as a guiding star in Indian industry, rising to the top with his big dreams, unwavering determination, and perseverance. I join the people of Maharashtra in honoring his memory and extend my heartfelt condolences to his family during this loss.

– P. C. Alexander, former Governor of Maharashtra

Post-death

After suffering his first stroke in 1986, Dhirubhai Ambani handed over the management of Reliance to his sons, Mukesh and Anil. In November 2004, Mukesh acknowledged in an interview that he had differences with Anil regarding ownership, stating that these issues were private. Following Dhirubhai Ambani’s passing, the Reliance Group was divided. Mukesh Ambani took charge of Reliance Industries Limited, while Anil Ambani led the Reliance Anil Dhirubhai Ambani Group. Mukesh became the CEO, and Anil was appointed as the Chairperson.

By 2017, Reliance Industries employed over 250,000 people. In 2012, it became one of only two Indian companies to rank among the top 100 on the Fortune 500 list of the world’s largest companies by revenue.

In popular media

In 1988, Hamish McDonald wrote an unauthorized biography of Dhirubhai Ambani titled The Polyester Prince, highlighting his political and business achievements. However, the book was not published in India as the Ambani family threatened legal action. In 2010, an updated version titled Ambani and Sons was released, and no legal action has been taken against the publisher.

The Bollywood film Guru, directed by Mani Ratnam, is believed to be inspired by Dhirubhai Ambani’s life due to similarities in the storyline. However, Ratnam has denied that it is a biography, stating that the film captures the “essence of the character” from real-life influences.

Accolades

• On 15 June 1998, Dhirubhai Ambani became the first Indian to receive the Dean’s Medal from The Wharton School, University of Pennsylvania, recognizing his exceptional leadership.

• In January 2016, Dhirubhai Ambani was posthumously awarded the Padma Vibhushan, India’s second-highest civilian honor.

Conclusion

Dhirubhai Ambani’s journey from a small-town boy to the founder of one of India’s largest conglomerates is a testament to his visionary leadership and unwavering determination. Through his innovative ideas and bold business strategies, he not only transformed the Indian business landscape but also inspired countless entrepreneurs. His legacy continues to shape the future of Indian industries, and his story remains an enduring example of how passion, perseverance, and vision can turn dreams into reality. Dhirubhai Ambani will always be remembered as a true pioneer who revolutionized Indian business and set new benchmarks for success.

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