Good Morning India:Good Luck, Omar Abdullah

Media Pulse

Across the length and breadth of this country millions of people from all strata of society are praying for the health of a man who is neither a statesman or a saint, a godman or a reformist. He belongs to that class which the political Left has termed ‘bloodsucker’ and their more conservative brethren have denounced for his single-minded adherence to the bottom line but who commands more respect and love from the people of India than probably any political figure or patriarch ever did with the exception of Mahatma Gandhi.

Dhirajlal Hirachand Ambani (better known as Dhirubhai), corporate India’s living legend, is presently battling for his life in a Mumbai hospital where he was admitted after a massive stroke. This man’s life is a rags-to-riches fairy tale. A high school dropout from Chorwad in Junagadh district (Gujarat) he is, today, the founder of the biggest company in India, involved in over half a dozen basic industries, whose market capitalisation is nearly US $ 9 billion and which accounts for over 15 per cent of the 30 issue Bombay index.

There have been, and are, many Indian industrialists whose fame and success have made them world figures; the Tatas, the Birlas, the Singhanias are just a few of them. However, none of them have become so close to the common people of India as Dhirubhai Ambani of Reliance Industries which, incidentally, is the first Indian company to enter the Fortune 500 list.

He is a true philanthropist, not a preacher or a reformer. His corporate philosophy and brand of management were initially ridiculed by his competitors. Dhirubhai saw beyond the banks and financial institutions to the real source of funds__the retail investor. Thus, his corporate objectives were simple: better company results and benefits for his shareholders.

Today, Reliance has a retail shareholder base of 3.5 million, the largest in the country and probably in many parts of the world. It took Dhirubhai just a little over 20 years to create his mega company and during that period he has conscientiously looked after the interests of his shareholders. Those who invested in Reliance originally in 1977 have earned a compounded annual rate of nearly 45 per cent. Is it any wonder that the media is full of stories of houses built and daughters married off solely because Reliance made it possible?

Dhirubhai’s reliance (pun intended) on people for investment funds paid off. While most industrialists went to the banks and institutions for funds, Dhirubhai went to the public. So what if his company incurred huge costs in servicing his massive shareholder base; Reliance is the only company that had to hire a stadium to hold its annual general meeting, so large was the shareholder attendance. Dhirubhai argued with ministers against policies which, he felt, adversely affected industry profits and fought with cartels of brokers who, in 1982, tried to short Reliance shares and, in the process, nearly went bankrupt themselves.

After that, there was no looking back. Reliance became the leader of the stock market and the darling of investors. Investor confidence became stronger with each passing year and reached a frenzy of enthusiasm when Dhirubhai declared a 1:1 bonus in the early 1990s. Reliance’s performance defied logic. Even when oil prices nosedived to their lowest ever in 1997, Reliance posted profits which were 25 per cent higher than the previous year. It was the first Asian company to issue 100-year maturity bonds in the global market. Added to that is a sense of ‘do it yourself’. He does not wait for infrastructure to be created to support his operations. He goes out and builds it himself; be it a power plant for his petrochemical enterprise or a canal to bring water from large distances for his cooling plant.

The secret of Dhirubhai’s success lay in his vision that allowed him to predict optimum integration strategies for his product mix and his company’s ability to customise technologies for optimal cost-efficiency. But Dhirubhai himself is most grateful to his shareholders who have supported him through thick and thin and whose fortunes and future, he feels, are unbreakably tied with that of Reliance. It is a trust that he considers sacred. Technology and business acumen can be bought or hired but Dhirubhai has added another dimension to big business__caring for the small shareholder.

Today, Dhirubhai is in hospital, hooked to a life support system. Central and State Ministers, political leaders, film personalities, journalists are visiting the hospital. Friends and relatives are keeping a round-the-clock vigil at his bedside. And millions of people, shareholders and staff, trade associates and labour, are praying in anguish and grief for a billionaire whom most have never met but all love and revere. Dalal Street went into mourning on the day Dhirubhai was admitted to hospital with Reliance shares dropping by nearly four per cent. Investors and share market professionals, however, are agreed that the fall in the Reliance cap was a knee-jerk sentiment based on sentiment and did not represent a professional reaction. Both Dhirubhai’s sons, Anil and Mukesh, are deeply involved in Reliance affairs. In fact, they had more or less taken over the company after Dhirubhai suffered his first stroke 10 years ago which left him partially paralysed.

Both sons have shown themselves to be intelligent and professional and fully capable of running the multifarious business activities of the Reliance group, of course, under the benevolent eye of their father. More important, both of them are equally dedicated to the well-being of the company’s shareholders. Reliance has progressed with leaps and bounds even after Dhirubhai had to cut down his activity in company affairs. The Ambani brothers have passed through the test of fire and emerged fine-honed. They have an excellent rapport and have carefully taken up roles in which they are proficient. Thus, Anil Ambani, a degree from Wharton behind him, is the hard driving chief executive who has inherited his father’s confidence and creativity.

He has an excellent understanding of the financial markets both in India and abroad. And Dhirubhai has seen to it that the whole organisation is fine-tuned to support the management. Therefore, as a business organisation, Reliance will undoubtedly continue on the path of macro-expansion which has been its trademark strategy since inception. The brothers are fully capable of running the organisation on the basis of their father’s precepts.