Dhirajlal Hirachand Ambani (Hindi: धीरजलाल हीराचंद अंबानी; 28 December 1932 – 6 July 2002) was an Indian industrialist who foundedReliance Industries, a petrochemicals, communications, power, and textiles conglomerate and one of the 3 privately owned Indian companies in the Fortune 500. Ambani took his company public in 1977. Dhirubhai has been among the select few to be figured in theSunday Times list of top 50 businessmen in Asia.^[1] His life has often been referred to as a true "rags to riches" story.

Dhirubhai started off as a small time worker with Arab merchants in the 1950s and moved to Mumbai in 1958 to start his own business in spices. After making modest profits, he moved into textiles and opened his mill near Ahmedabad. He founded Reliance Industries in 1966, and today, the company, with over 85,000 employees, provides almost 5% of the Central Government's total tax revenue. Ambani was credited with introducing the stock market to the average Indian investor, and thousands of investors attended the Reliance annual general meetings, which were sometimes held in a football stadium, with millions more watching on television.^{[citation needed]}

In 1985 after a heart attack Dhirubhai handed over the Reliance empire to his sons Mukesh and Anil. After his death, the group was split into Reliance Industries Limited, headed by Mukesh Ambani, and Reliance Anil Dhirubhai Ambani Group (Reliance ADAG), headed by Anil Ambani.

Early life (1949-1958)

Hirachand Ambani was a low wage villager. Hirachand and Jamnaben had two daughters - Trilochanaben and Jasuben - and three sons - Ramnikbhai, Dhirubhai and Natubhai. Dhirubhai was the second son. Just after Dhirubhai was through his annual matriculation examination and even before the result was out, Hirachand called him home (to Chorwad). Hirachand had been unwell for quite some time and had grown extremely weak and frail.

Hirachand asked his son the very night he reached home. "Well, I'll tell you. You know I have been unwell for past several months. I cannot work any more. I know you want to study further but I can't afford that any more. I need you to earn for the family. I need your money. The family needs it. You must work now. Ramnikbhai has arranged a job for you in Aden. You go there."^{[citation needed]}

Dhirubhai had really wanted to study for a bachelor's degree, but his ambition melted when he looked into the anxious eyes of his sick father. "I'll do as you say," he said, and the very next morning he left for Rajkot to get his passport. Those days Indians were exempt from obtaining a visa for entering Aden, but there were rumors around that the No Visa regime was about to end any day. So he needed to hurry up before the visa rules changed. In a few days he was in Bombay to board the ship to Aden. It was on board the ship that Dhirubhai learnt from a Gujarati newspaper that he had passed his matriculation examination in second division.^{[citation needed]}

On reaching Aden, Dhirubhai joined office on the very day of his arrival. It was a clerk's job with the A. Besse & Co., named after its French founder Antonin Besse. Those days Aden was the second busiest trading and oil bunkering port in the world after London handling over 6,300 ships and 1,500 dhows a year.^{[citation needed]}

And, there in Aden, A. Besse & Co. was the largest transcontinental trading firm east of Suez. It was engaged in almost every branch of trading business - cargo booking, handling, shipping, forwarding, and wholesale merchandising. Besse acted as trading agents for a large number of European, American, African and Asian companies and dealt with all sorts of goods ranging from sugar, spices, food grains and textiles to office stationery, tools, machinery and petroleum products. Dhirubhai was first sent to the commodities trading section of the firm. Later, he was transferred to the section that handled petroleum products for the oil giant Shell.^{[citation needed]}

"I learnt business at Besse which was then the best trading firm this side of the Suez," he used to tell friends in later years. He was quick on the uptake. He learnt the ways of commodity trading, high seas purchase and sales, marketing and distribution, currency trading, and money management. During lunch breaks he roamed the souks and bazaars of Aden where traders from numerous different continents and countries bought and sold goods worth millions of pounds sterling, the then global currency, during the day. He met traders from all parts of Europe, Africa, India, Japan and China. Aden was the biggest trading port of the times, a trading port where goods landed from all parts of the world and were dispatched to the farthest corners of different continents. Speculation in manufactured goods and commodities was rife all over the Aden bazaars.^{[citation needed]}

Dhirubhai felt tempted to speculate but had no money for that and was still raw for such trading. To learn the tricks of the trade he offered to work free for a Gujarati trading firm. There he learnt accounting, book keeping, preparing shipping papers and documents, and dealing with banks and insurance companies., skills that would come handy when he launched himself into trading about a decade later in Bombay. At the Besse office during the day he polished his skills in typing and Pitman shorthand, drafting commercial letters, and composing legal documents.^{[citation needed]}

At the boarding house where he lived with another twenty-five or so young Gujarati clerks and office boys, he devoted long hours of the night mastering English grammar, essay writing, current affairs and a host of subjects that took his fancy from week to week. He was the first to snatch the English, Gujarati and Hindi daily papers and weeklies as soon as they arrived by the ship every day. The Times of India, Blitz, Janmabhoomi and Navajeevan formed his favorite reading material. He also devoured all sorts of books, magazines and journals the passengers arriving from various European and Indian ports left in the ships and at the offices of various shipping agents.^{[citation needed]}

"Of all the books I read so avidly those days one I remember most fondly are (Jawaharlal Nehru's) the "Glimpses of World History" and the "Discovery of India," he would recall long after his Aden days. "They were fat, big books but written in simple English and to me they opened a whole new world of adventure, of human wisdom and human folly. I began reading them not to learn of world history but to practice my English but once I opened their pages their breadth of vision had me in a thrall. I used to keep a dictionary by my side when reading these books and note down every new word I came across to increase my vocabulary. Later when I used to draft letters to ministers and senior officials during my early Bombay days, I used whole lot of quotations, phrases and impressive words from these two looks ."^{[citation needed]}

He also gorged on dozens of books and magazine articles on psychology that became his favourite subject for a long time. "I learnt much from this class of my reading," he sometimes said, "I learnt how we humans and animals love to be loved more than anything else, how we are driven by desire to earn the love, affection and honor of those around us, what it is to be a leader, how to motivate those whom we want to attain great heights, how ideologies and interests clash and reconcile or cancel each other.^{[citation needed]}

"More than anything else I learnt that nothing big can ever be achieved without money, influence and power and I also learnt that money, influence and power alone cannot achieve anything in life, big or small, without a certain soft, delicate, sensitive, understanding human touch in all one's deeds and words."^{[citation needed]}

After he thought he had learnt the basics of commodities trading, Dhirubhai began speculating in high seas purchase and sales of all sorts of goods. He did not have enough money of his own for such speculative trading. So he borrowed as much as he could from friends and small Aden shopkeepers on terms nobody had ever offered them. "Profit we share and all loss will be mine" became his motto. During lunch break and after office hours he was always in the local bazaar, trading in one thing or the other.^{[citation needed]}

Soon, those around him found that he had an uncanny knack for such speculative trading. He seldom lost money in any deal. "I think I had an animal instinct about such trading but there was a lot of reading and understanding of market trends behind that animal instinct of mine. I read every bit of paper I could lay my hands on about what was happening around the world, I listened carefully to every word uttered in the market, picked every bit of gossip in the shipping circles and pondered long through the night in the bed about the pros and cons of every deal I wanted to make."^{[citation needed]}

Meantime, the Shell oil refinery and the first oil harbor came up in Aden in 1954, the year Dhirubhai returned home to Gujarat to marry Kokilaben. As expected, A. Besse & Co. became the agents for distribution of Shell refinery products. Dhirubhai had done well at the office during his first five years. Now he was sent on promotion to the oil filling station at the newly built harbour.^{[citation needed]}

He liked the new job, though it was a lot more demanding than the desk job in the commodities section. Here he had to service the ships bunkering for diesel and lubricants. He enjoyed visiting the ships, making friends with sailors and the engine staff I heard from them first hand accounts of their voyages in different parts of the world of which he had until then read about only in books and magazines. And, here it was that he first began dreaming of one day building a refinery of his own.^{[citation needed]}

"It was a crazy idea for a petrol pump attendant to want to build a refinery of his own, but that is the sort of crazy ideas I have been playing with all my life," Dhirubhai recalled at the time Reliance's 25 million ton oil refinery, the largest grassroots refinery in the world, went on stream in Jamnagar in 1999. "I have been able to build this refinery because I decided long years ago not to settle for anything else," he said, "I had heard a Yemeni proverb in Aden "la budd min Sana'a wa lau taal al-safr" (You must visit Sana'a, however long the journey takes). I never forgot that saying."^{[citation needed]}

By the late 1950s it became clear that the British rule in Aden would not last long in the face of growing Yemeni movement for independence supported by Gamal Abdel Nasser's revolutionary government from across the Suez. The large Indian community of Hindu and Parsee Gujaratis began preparing to move out of Aden. Some began returning home to India, while some chose to settle in Britain. Aden Indians those days were allowed to settle in Britain.^{[citation needed]}

Where to go on leaving Aden was debated among the colony's settlers heatedly everyday. Some of Dhirubhai's friends told him that he should migrate to London where, considering his talents, acumen and guts, he could find better opportunities of growth. At the port and on ships at Aden he often heard glowing accounts of post-war Britain and the promises of a life of much greater ease there than one could ever hope to find in India.^{[citation needed]}

Dhirubhai weighed his options.. By now he had saved some money and was thinking of setting up some business of his own. Although Dhirubhai's father had died in 1952, he had in the meantime been blessed with his first son, Mukesh D. Ambani, in April, 1957. Kokilaben and Mukesh were back home in India.The choice of opening a shop somewhere in London was tempting but he felt India was calling him home.^{[citation needed]}

Those were exciting years in India. The country was in the midst of implementing the Second Five Year Plan which promised to build big industries, raise new big dams across many rivers, lay new roads through the length and breadth of the country, boost agricultural production to new record levels and set up a huge network of food grains procurement centers.^{[citation needed]}

Though by the end of 1958, the newspapers coming from India were painting a rather gloomy picture of the country's finances and foreign exchange reserves, there was also a new vigor and a new fervor in their reports of a new  100 billion Five Year Plan then under preparation. The Plan promised to open massive new opportunities for growth for the country's youth. Jawaharlal Nehru was daily exhorting the young to cast away their old ways and help build a new India. His words were stirring and roused the passions of every young Indian, especially of those living far away from the country.^{[citation needed]}

Dhirubhai was now 26 years (1957), full of youthful vigor and vitality, and filled with high hopes for himself and for the new India of Nehru's dreams. He just could not miss the excitement of being in India in such tumultuous times. He decided to return home, instead of going to London to live a life of ease there.^{[citation needed]}

[edit]

Majin Commercial Corporation

Ten years later, Dhirubhai Ambani returned to India and started "Majin" in partnership with Champaklal Damani, his second cousin, who used to be with him in Aden, Yemen. Majin was to import polyester yarn and export spices to Yemen.^[2] The first office of the Reliance Commercial Corporation was set up at the Narsinatha Street in Masjid Bunder. It was a 350 sq ft (33 m²) room with a telephone, one table and three chairs. Initially, they had two assistants to help them with their business. During this period, Dhirubhai and his family used to stay in a one-bedroom apartment at the Jai Hind Estate in Bhuleshwar, Mumbai. In 1965, Champaklal Damani and Dhirubhai Ambani ended their partnership and Dhirubhai started on his own. It is believed that both had different temperaments and a different take on how to conduct business. While Damani was a cautious trader and did not believe in building yarn inventories, Dhirubhai was a known risk-taker and believed in building inventories, anticipating a price rise, and making profits.^[3] In 1968, he moved to an upmarket apartment at Altamont Road in South Mumbai. Ambani's net worth was estimated at about  1 million by late 1970s.

Reliance Textiles

Sensing a good opportunity in the textile business, Dhirubhai Ambani, along with Amit Mehra, a Delhi-based chartered accountant and company secretary residing in Ashok Vihar, Delhi, started the first textile mill at Naroda, in Ahmedabad in the year 1966. Textiles were manufactured using polyester fiber yarn.^[4] Dhirubhai started the brand "Vimal", which was named after his elder brother Ramaniklal Ambani's son, Vimal Ambani. Extensive marketing of the brand "Vimal" in the interiors of India made it a household name. Franchise retail outlets were started and they used to sell "only Vimal" brand of textiles. In the year 1975, a Technical team from the World Bank visited the Reliance Textiles' Manufacturing unit. This unit has the rare distinction of being certified as "excellent even by developed country standards" during that period. Amit Mehra had played a pivotal role in helping and supporting Dhirubhai in this success.^[5]

[edit]Initial public offering

Dhirubhai Ambani is awarded with starting the equity cult in India. More than 58,000 investors from various parts of India subscribed to Reliance's IPO (Initial public offering) in 1977. Dhirubhai was able to convince large numbers of small investors from rural Gujarat that being shareholders of his company would be profitable.^{[citation needed]}

Reliance Industries was the first private sector company whose annual general meetings were held in stadiums. In 1986, the annual general meeting of Reliance Industries had number of first-time retail investors investing in Reliance. Ambani's net worth was estimated at about  1 billion by early 1980s.^{[citation needed]}

[edit]

Dhirubhai's control over stock exchange

In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures.^[6] It was rumored that the company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, The Bear Cartel, a group of stock brokers from Calcutta, started to short sell the shares of Reliance. To counter this, a group of stock brokers till recently referred to as "Friends of Reliance" started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange.^{[citation needed]}

The Bear Cartel was acting on the belief that the Bulls would be short of cash to complete the transactions and would be ready for settlement under the "Badla" trading system operative in the Bombay Stock Exchange. The bulls kept on buying and a price of  152 per share was maintained till the day of settlement. On the day of settlement, the Bear Cartel was taken aback when the Bulls demanded a physical delivery of shares. To complete the transaction, the much needed cash was provided to the stock brokers who had bought shares of Reliance, by none other than Dhirubhai Ambani. In the case of non-settlement, the Bulls demanded an "Unbadla" (a penalty sum) of  35 per share. With this, the demand increased and the shares of Reliance shot above  180 in minutes. The settlement caused an enormous uproar in the market.

To find a solution to this situation, the Bombay Stock Exchange was closed for three business days. Authorities from the Bombay Stock Exchange (BSE) intervened in the matter and brought down the "Unbadla" rate to  2 with a stipulation that the Bear Cartel had to deliver the shares within the next few days. The Bear Cartel bought shares of Reliance from the market at higher price levels and it was also learnt that Dhirubhai Ambani himself supplied those shares to the Bear Cartel and earned a healthy profit out of The Bear Cartel's adventure.^[7]

After this incident, many questions were raised by his detractors and the press. Not many people were able to understand as to how a yarn trader till a few years ago was able to get in such a huge amount of cash flow during a crisis period. The answer to this was provided by the then finance minister, Pranab Mukherjee in the Parliament. He informed the house that a Non-Resident Indian had invested up to  220 million in Reliance during 1982-83. These investments were routed through many companies like Crocodile, Lota and Fiasco. These companies were primarily registered in Isle of Man. The interesting factor was that all the promoters or owners of these companies had a common surname Shah. An investigation by the Reserve Bank of India in the incident did not find any unethical or illegal acts or transactions committed by Reliance or its promoters.^[8]

Death

Final Journey: Dhirubhai Ambani's funeral saw thousands of people attending. Mukesh Ambani and Anil Ambani can be seen carrying their father's body as per Hindu traditions

Dhirubhai Ambani was admitted to the Breach Candy Hospital in Mumbai on June 24, 2002 after he suffered a major stroke. This was his second stroke. The first one had occurred in February, 1986 and had kept his right hand paralyzed. He was, latterly, in a state of coma for more than a week. A number of doctors were used. He died on July 6, 2002, at around 23:50 UTC+05:30.

His funeral procession was not only attended by business people, politicians and celebrities but also by thousands of ordinary people. His elder son, Mukesh Ambani, performed the last rites as per Hindu traditions. He was cremated at the Chandanwadi Crematorium in Mumbai at around 16:30 UTC+05:30 on July 7, 2002.^{[citation needed]}

He is survived by Kokilaben Ambani, his wife, two sons, Mukesh Ambani and Anil Ambani, and two daughters, Nina Kothari and Deepti Salgaonkar. Dhirubhai Ambani started his long journey in Mumbai from the Mulji-Jetha Textile Market, where he started as a small-trader. As a mark of respect to this great businessman, The Mumbai Textile Merchants' decided to keep the market closed on July 8, 2002.^{[citation needed]} At the time of Dhirubhai's death, Reliance Group had a gross turnover of  750 billion (US$15 billion). In 1976-77, the Reliance Group had an annual turnover of  700 million (Note that Dhirubhai had started the business with just  150 000 (US$3500).^{[citation needed]}