Early Life of Mukesh Ambani
Mukesh Ambani was born on 19 April 1957 in Yemen. This was because his late father and Indian legend Dhirubhai Ambani then worked as a petrol station attendant there.
The family soon moved to India where their standard of living improved as they now lived in a 2 bedroom apartment. It was good times from here as his father successfully set up his business in the teHis father soon purchased a 14 story building for the family to live in. Despite this, his father believed that it was best for Mukesh to have a normal childhood. He would use public transport to go to school and never received any allowance.
He went onto graduate as a Chemical Engineer from the Institute of Chemical Technology,
Dropping out for Reliance
Mukesh went onto pursue his MBA from Stanford. It was at the same time that his father had successfully beaten the Tata’s and Birla’s to secure a license for PFY (Polyester Filament Yarn) His father always believed that real-life skills harnessed through experience, not by sitting in a classroom. Due to this belief, he asked Mukesh to drop out and join him in setting up the
Mukesh played an important role in setting up a plant that was way ahead of its time. This was possible because his father always considered him as a business partner and allowed him to contribute without the experience.
He went on to further the Reliance footprint by establishing the world’s largest petroleum refinery at Jamnagar, Gujarat. Mukesh however did not stop here as he also set up their telecom arm
Anil Ambani vs Mukesh Ambani
To everyone’s surprise, Dhirubhai Ambani passed away from a stroke in 2002. This the second time he had suffered a stroke. The first time in 1986 post which the company run by brothers Mukesh and Anil
Their father however passed away without a will. Soon cracks began to develop in the brothers’ relationship which blew up to become a public feud. Their mother decid it time for the assets of the company to be split between the two brothers.
This was necessary to end the feud. Mukesh received Oil and Gas, Refining, and petrochemical companies in the split. Whereas Anil got what called the rising sun companies – Electricity, Telecom, and Financial services segment.
This was a blow to Mukesh as Anil received some companies that Mukesh had worked hard to create and which had a higher growth rate. Mukesh couldn’t even enter these industries as the split also came with a non-compete clause.
Mukesh however saw his opportunity to get rid of the clause post the crisis of 2008. Anil found himself in trouble as many of his projects stuck and required gas at reasonable rates. Mukesh step in to supply the gas on the condition the non-compete clause annulled.
This however cannot be mistaken for brotherly love. What ensued soon after was Mukesh playing a hand to ensure that the deal between Anil’s Rcom and South Africa’s MTN never took place. This deal would have catapulted RCom to become one of the world’s largest mobile companies.
Mukesh’s quest for the telecom sector was clearly not for business purposes alone. After all, RCom a company whose creation and early growth owed to Mukesh. Sadly he had unjustly lost the company in the split.
Mukesh spent the next 5 years pouring money he earned from his oil and petrochemical business to create a competitive company in the telecom sector. This seemed to be a crazy decision at the time as the telecom sector already dominated by a number of giants competing for every morsel in the industry.
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Mukesh’s Jio is here to take over
Eventually, Mukesh launched Jio with 4G. What followed was Jio offering the lowest prices possible in the industry making them impossible to compete with. Mukesh’s business acumen was clearly visible here. He took advantage of the industry as it had for years benefitted from expensive products in return for poor 2G and 3G services. Jio even forced other players now to offer their products at lower margins.
The pricing war that followed soon saw Anil’s Reliance Communication wash away. However, Anil was not the only one affected. Giants like Bharti Airtel soon realised that Jio was there to dominate. In addition unlike others in the sector, Jio had deep pockets thanks to Reliance’s petrol business. Vodafone and Idea barely even managed to survive and their position hasn’t improved since.
It took the combined efforts of the telecom sector 25 years to build a 2G network across India. It is noteworthy that Jio managed to do this in just 3 years thanks to Mukesh’s drive and successful execution.
Taking Reliance to new heights
Mukesh Ambani successfully diversified Reliance into a conglomerate that owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.
Apart from setting up Telecomm Giant ‘JIO’, Mukesh Ambani is also slowly venturing into the Retail and e-commerce industry by Partnering with Mark Zuckerberg’s Whatsapp. In April 2020, Facebook had invested $5.7 Bn in Reliance Jio by acquiring a 9.99% stake at a pre-money valuation of $65.95 Bn.
Further to deepen its roots in the Retail segment, Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries also acquired Kishore Biyani’s Future Group in a ₹24,713 crore deal. RIL also acquired a majority stake in online pharmacy ‘Netmeds’ for about ₹620 crores in the same month.
Under his leadership, Reliance became the first Indian company to exceed $100 billion in market capitalization. It is also currently the most profitable company in India.
The company has been responsible for almost 5% of the revenue the government of India earns from Customs and Excise duty. The growth also propelled him to become the richest man in Asia. His net worth as of 2021 stands at $76.3 billion.
Although being India’s richest man for several years now, Mukesh never rested on his laurels and still doesn’t. It can be seen in his pursuit to turn Reliance into a zero-carbon company. This is despite Reliance’s petrochemical being one of its strongest pillars.
Ambani is also often heard saying “Data is the new oil”. This highlights a shift in his focus towards the tech sector.
In 2020, Mukesh also stepped up to help his brother Anil who was now broke upon the request of his mother. It was reported by Bloomberg that Mukesh had made Anil beg to receive this favour. To further salt his wounds Anil even furthered his humiliation by publicly thanking his rival.
Mukesh goes where business takes him. This can be clearly seen when between 2019-20 period. He had clearly supported data nationalism in order to curb the outflow of Indian user data to companies like Facebook and Google. This soon turned to cooperation with the two companies when Reliance sold stakes to the two in order to become debt-free.
Mukesh Ambani’s success story for the better or worse is also India’s success story today. This is because the growth of the company today also plays a crucial role in India’s growth. What is even more astonishing is that Mukesh not only has managed to make a name for himself. He also has managed to step out of his father’s shadow of which towered the country in the last century.
It is very rare to come across a second-generation success story. Most of them end up messing up the wealth left behind by their forefathers. This can easily be seen in Anil Ambani’s case.
That’s all for this post. Let us know what do you think of Mukesh Ambani’s Success Story and who you would like us to cover next.