Dhirubhai Ambani and Reliance
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BACKWARD INTEGRATION Contd...The process of
expansion revealed Dhirubhai's interest in integrating vertically and
concentrating on petrochemicals and other downstream products. Some of the
characteristic features of the Reliance group were:
(i) Continuous vertical integration;
(a) From synthetic textiles into the manufacture of polyester fibre and
filament yarn;
(b) From yarn and fibres to intermediaries like purified terephthalic acid
and mono-ethylene glycol; and
(c) Further upstream into basic building blocks like paraxylene;
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(ii) Consolidation of internal capabilities generated
in this process through related horizontal diversification into
petrochemical end-products such as detergent intermediates, for example,
linear alkyl benzene (LAB), or thermoplastics like high density
polyethylene (HDPE), low density polyethylene (LDPE), polyvinyl chloride
(PVC), polystyrene (PS), polypropylene (PP) and styrene butadiene rubber
(SBR - synthetic rubber) and their intermediates and basic building
blocks; and (iii) Efforts to complete this process of integration
through investment in an NGL/naphtha cracker and in oil extraction
itself. |
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THE STOCK MARKET ADVENTURE
Dhirubhai's biggest contribution to the nation was the development of an
equity culture. Having understood the psychology of the Indian capital
markets and the mindset of Indian investors, he was instrumental in
introducing the equity culture in India. Dhirubhai gave importance to the
small investor and his contributions, and by doing so, he involved millions
of middle class investors. Reliance went public in 1977 and had its first
annual general meeting (AGM) in 1977. Reliance Industries had 58000
investors in 1977. So large was Reliance's investor base that at times
executives had to go to small cities, with the share certificates, annual
reports and other such correspondence, as personal luggage, and post them
locally.
Reliance holds the record for bringing out the single largest domestic issue
of more than Rs 21 billion in convertible bonds for Reliance Petroleum in
1993. The market capitalization of Reliance was Rs 1.2 billion in 1980,
which rose to Rs. 9.96 billion in 1990, and shot up to 96.2 billion in 1995,
making Dhirubhai one of the richest men in the world.
The end of the High Unit Value scheme of 1978 brought about a dip in the
profits of Reliance. In spite of this, Dhirubhai declared a dividend of 27
%. Whenever Reliance needed money to fund its expansion purposes, Dhirubhai
opted for a public issue. From 1979 to 1982, Reliance brought out several
issues for different purposes like: financing a worsted spinning mill,
modernizing its already existing textile mill, financing a PFY plant, and to
overcome the bear syndicate crisis respectively.
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CORPORATE BATTLES OF DHIRUBHAI AMBANI
POLITICAL BATTLES OF DHIRUBHAI AMBANI
RELIANCE WITHOUT DHIRUBHAI
QUESTIONS FOR DISCUSSION
EXHIBIT I RELIANCE GROUP OF COMPANIES
EXHIBIT II THE AMBANI FAMILY TREE
EXHIBIT III CHRONOLOGY OF EVENTS
EXHIBIT IV THE BOMBAY DYEING AND MANUFACTURING CO. Ltd
EXHIBIT V BACKWARD INTEGRATION
EXHIBIT VI MANAGEMENT MANTRAS OF DHIRUBHAI AMBANI
EXHIBIT VII ACHIEVEMENTS OF DHIRUBHAI AMBANI
ADDITIONAL READING & REFERENCES
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