Success Story- 17

Dhirubhai Ambani 2002 stamp of India.jpg
Dhirajlal Hirachand Ambani

Presenting the story of a Legend who was born in a poor family but went on to become the founder of one of the most renowned companies called Reliance Industries .

He always believed in the words of Bill gates “If You are born poor it is not your mistake but if you die poor it’s your mistake.”

Dhiru Bhai Ambani was born on 28 December 1932 in a small village called Chorwad (Gujarat).

Dhurubhai Ambani was the son of Hirachand Gordhanbhai Ambani. His father was a teacher in a small village school. Dhirubhai Ambani got married with Kokila and had four children Mukesh Ambani, Anil Ambani, Nina Bhadrashyam Kothari, and Dipti Dattaraj Salgaocar. He was just 10th pass. After completing high school, he was doing a small job, on a salary of about 300 rupees per month.

At the age of 17, he went to yamen where his brother Ramniklal was working. In yamen, he was working at a petrol pump. He worked hard and got promoted as the filling manager at the company. He worked in yamen for a while, after a few years in 1958 he returned to India. Dhirubhai Ambani’s dream to become a businessman got its roots in Yamen.

In India Dhirubhai Ambani started to give wings to his entrepreneur dream,he first started a textile business with his cousin Champaklal. He named his business as “Majin” involved in export of goods like spices and ray to yaman and import of Polyster from Yaman. Dhirubhai started his first officen at the Narsinatha Street in Masjid Bunder in a small area of 350 sq feets, with a few things like 3 chairs, a table and a telephone.

At this time he used to live with his family in a 2 BHK flat. Dhirubhai Ambani’s way of doing business was very unique and different, he enjoyed taking risks and believed in building inventory to rise his income,this all was a result of his good marketing skills.

His cousin Champaklal was not convinced by the way Dhirubhai Ambani wanted to take his business ,So due to this difference in their openions, In 1956 Dhirubhai ended his partnership with Champaklal.

In the year 1966 Dhirubhai Ambani came up with his Reliance Commercial Corporation and today this is known as The Reliance Industries.He took Reliance public in 1977 and was worth $25.6 billion .

He launched the brand ‘ vimal ‘during this time which sold polyester materials for saris , shawls, suits and dresses .

Dhirubhai started extensive marketing of the brand in the interiors of India and 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.

In 1988, Reliance Industries came up against a rights issue regarding partly convertible debentures.  Rumor spread 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 until recently referred to as “Friends of Reliance” started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange.

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 buying and a price of ₹ 152 per share was maintained until 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, much money was provided to the stock brokers who had bought shares of Reliance, by Dhirubhai Ambani. In the case of non-settlement, the Bulls demanded an Unbadla, or 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 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.

After this incident, many questions were raised by the press. Not many people were able to understand how a yarn trader until 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. 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.

Dhrubhai was admitted to a hospital in Mumbai on 24 June 2002 after he suffered a major stroke. It was his second stroke, the first had occurred in February 1986 and had paralyzed his right hand. He was in a coma for more than a week and a number of doctors were consulted.

He died on 6 July 2002.

In the words of Atal Bihari Vajpayee, The Former Prime Minister of India-

“The country has lost iconic proof of what an ordinary Indian fired by the spirit of enterprise and driven by determination can achieve in his own lifetime”

In 2016, he was honored with the Padma Vibhusan, India’s second highest civilian honor for his contributions to trade and industry.

Dhirubhai Ambani’s journey inspires us to follow our dreams and aim high with confidence in one’s own efforts and abilities.

Stay tuned for more success stories…………

Contact- dipupop@yahoo.co.in

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