Sons are ready to take RIL forward: Analysts

None of this is to suggest Dhirubhai wasn’t critical to Reliance’s success — rather, it is to say that his succession planning was excellent, and that he gave his sons enough hands-on training. Says Arun Kejriwal, director at the investment advisory firm, KRIS, ‘‘Mukesh and Anil have been actively running the companies for over a decade since their father’s last stroke in 1986. Of course, there are some concerns and some speculation in the market,’’ he added. Mukesh is the vice-chairman and managing director of the group and Anil its managing director.

According to investment banker and market analyst P.N. Vijay, ‘‘Dhirubhai’s passing away will have an impact on the share prices of RIL. He was seen as a market friendly person and there would be some uncertainty. Even if RIL continues to do well, investors may tend to look at the RIL shares with some apprehension. As far as the group is concerned, I do not see any major impact on the group since both the sons Mukesh and Anil are well entrenched. Dhirubhai continued to be the father figure but the bulk of the work was being done by the two sons. If there is any concern it would be on the possibility of a split, not that I am saying that there would be one. But the Indian family-run business groups, be it the Modis or the Bajajs, have seen such splits. Hence, there might be some apprehensions on the same count in the Reliance Group.’’

Vinayak Chatterjee, Chairman, Feedback Ventures, concurs. ‘‘Dhirubhai adapted his strategies superbly with the changing environments. But, most important, he was able to build an organisation, so I don’t think there would be much of an impact on the Reliance Group. He has already set the group on a path and has been able to blend entreprenuership and professionalism in the group of the maximum possible extent.’’

Apart from handling the day-to-day operations of the group for more than 15 years now, Dhirubhai’s two sons, Mukesh and Anil, have successfully managed to blend the interests of the old economy giant with the prospects of the new economy. The group’s expansionary urges now find an outlet in the new economy. As part of this thrust, the group has floated Reliance Telecom, an unlisted company with two operating divisions — Reliance Mobile and Reliance Basic. Reliance Mobile provides cellular telephony services in 13 states while Reliance basic holds licences to provide fixed line telecom services in Gujarat and has already rolled out 3,000 kilometers of fibre optic in the state.

The Ambanis are also planning to invest thousands of crores of rupees on building up a state-of-the-art, world-class, Internet infrastructure in India through a new venture called Reliance Infocom in which the group is planning tp invest Rs 15,000 crore. Reliance’s strategy is to roll out an all-optic-fibre, Internet protocol-based broadband network covering the top 115 cities in the country, accounting for more than 50 per cent of the country’s gross domestic product.

Tracing the road to success

1932: Born on December 28 in Chorwad, Gujarat to Jamna and Hirachand Ambani, a lowly-paid school teacher, studies till Class X

1949: Follows elder brother Ramniklal to Aden to work as pump attendant for Shell

1958: Returns to India to start his own company. Family moves into a one-bedroom flat at Bhuleshwar, Mumbai

1959: Dhirubhai starts Reliance Commercial with a capital of Rs 15,000 at Masjid Bandar. Exports mainly spices and fabrics

1966: Sets up a spinning mill at Naroda near Ahmedabad

1977: Reliance goes public, attracts 58,000 investors

1978: Launches Vimal brand

1980: Political clout evident as he sits next to Indira Gandhi in a victory rally after she wins elections

1982: Major bear hammering of Reliance stocks. Turns tables on bears by getting friendly brokers to buy all the shares sold by bears

1983: Allegations surface of Reliance using dummy companies, like Crocodile Investments and Fiasco Investments registered in Isle of Man, to purchase its own shares. Investigations inconclusive.

1985: Ambani-Nusli Wadia war begins. As FM, V.P. Singh takes decisions that hit Ambani

1986: Troubles continue. Profits tumble, projects get delayed, clearances suffer. Ambani has first paralytic stroke

1988: V.P. Singh leaves Congress. Reliance Petro issue subscribed by two million applicants. Ambanis get control of Larsen & Toubro

1990: V.P. Singh becomes PM. Ambanis quit L&T board. Several inquiries begin

1992: Becomes first firm to raise funds abroad through GDRs

1993: Sales cross Rs 4,000 crore. Reliance is India’s largest private sector company

1993: India’s largest public offering — Reliance Petroleum Issue

1995: Net profit crossed the Rs 1,000 crore mark (Rs 1,065 crore), unparalleled in the Indian private sector. Investigations into duplicate share issue

1998: Total assets cross Rs 35,000 crore (Rs 35,445 crore) and revenues cross Rs 14,000 crore (Rs 14,115 crore)

2000: Reliance commissions world’s largest refinery at Jamnagar

2000: Group profits cross Rs 2,500 crore mark, revenues cross Rs 20,000 crore mark (Rs 21,541 crore) and total assets cross Rs 50,000 crore (Rs 52,094 crore)

2001: Group revenues cross Rs 60,000 crore (Rs 60,160 crore), Reliance becomes largest business group in India

2002: RPL decided to merge with RIL, making India’s first Fortune 500 private sector company. Reliance acquires IPCL from the government

July 7, 2002: Dies in Mumbai’s Breach Candy hospital