Dhirubhai Ambani

Dhirubhai Ambani

Founder of an Indian industrial empire

Dhirajlal Hirachand Ambani, businessman: born Chorwad, India 28 December 1932; married (two sons, two daughters); died Bombay 6 July 2002.

Like many first generation taipans, Dhirubhai Ambani's meteoric rise from a petrol pump attendant in Yemen in the late 1940s to India's foremost industrialist, heading a business empire worth over $12.5bn, was paved with an intricate web of political patronage, deceit and corruption. But it was fired by Ambani's unmatched hunger and fierce entrepreneurial drive and skills that drove him to build Reliance Industries which includes the world's fifth largest refinery – but the largest greenfield plant ever – and hugely profitable textile mills, all located in his native western India.

Forty-five years after setting up a small trading business in the country's financial capital, Bombay, in a room not big enough to accommodate more than four people at a time, Ambani's Reliance Industries became India's first Fortune 500 private sector company. It accounts for around 30 per cent of the total profit of all private Indian companies and for five per cent of all exports, manufactures three per cent of the country's Gross Domestic Product and contributes 10 per cent to the state's indirect tax revenues. "The problem with Indians," Ambani said once, whilst tirelessly building up his businesses, "is that we have lost the habit of thinking big".

Ambani – better known simply as Dhirubhai – also created an investors revolution by bringing the stock markets within the common man's reach after Reliance Industries began its spate of public and special rights issues in the late 1970s.

In the history of the Indian market, there are two distinct eras: before and after Ambani. In the former, the wealthy and market-savvy rich folk invested in gold, land and blue chip shares. But after Reliance Industries went public in 1978 all that changed, giving birth to millions of middle-class investors who never regretted buying into the Ambani dream.

Few of them knew, understood or even cared about the intricate and vicious duels that raged between the market bulls and bears. But they certainly knew what the Reliance scrip represented – funds for education, a wedding, a hospital bill, a long desired overseas vacation and above all, security. For two generations of Indians, owning Reliance stock was even better than money in the bank – it always kept pace with inflation.

He was born Dhirajlal Hirachand Ambani in 1932 in Chorwad, a small town in western Gujarat state, the son of a poor schoolmaster. In 1949, after basic schooling, he followed his older brother to Aden in Yemen to work as a pump attendant with Shell where he first exhibited his risk-taking abilities. Soon after Ambani's arrival in Aden, the Yemeni administration discovered that its currency, the silver rial, was fast disappearing from the market. Investigations revealed that Ambani was melting down the silver coins and selling the ingots to bullion dealers in London. "The margins were small, but it was money for jam. After three months, it was stopped. But I made a few lakhs [a hundred thousand rupees]. I don't believe in not taking opportunities," he told an interviewer.

In 1959, a year after returning to Bombay, Ambani set up Reliance Commercial Corporation, a trading house exporting spices and fabrics in partnership with a cousin, with a small capital of 15,000 rupees. Their 350-sq-ft, one-roomed office in Bombay's crowded Masjid Bunder area had a telephone, one table and three chairs; if the two partners and their two employees were all present, one of them had to move to the teashop outside in the corridor.

Through creative business practices Ambani made enough money to start a cloth mill in Gujarat's largest city, Ahmedabad, in 1966 and 13 years later Reliance went public attracting 58,000 investors. In the early 1980s, Ambani, by now a moderately successful businessman, was patronised by the prime minister Indira Gandhi who, after a bruising political fight declared that she needed her "own" set of reliable businessmen. India was still a command economy, with all business controlled by the "licence raj" of political patronage and Ambani, being the favoured one, prospered beyond imagination.

In 1993, after a series of gruelling political and financial battles, Ambani moved into the petrochemical industry and in 2000 Reliance commissioned the huge oil refinery at Jamnagar on Gujarat's western coastline. Ambani was also a major player in planning an oil pipeline from Iran to India via Pakistan and to this end was one of the key players in initiating back channel or "Track II" diplomacy with Islamabad to secure his business interests. The project is still under review.

But in the process of cementing his industrial empire, Reliance Industries became a by-word for all that is wrong with India's corporate governance and business ethics. Government decisions, irrespective of the party in power, seemed always to benefit Reliance so that by the mid-1990s it had became a barometer for the financial markets and anything awry with the company reflected negatively on India's fortunes.

Despite his wealth, Ambani was a modest and generous man who never forgot his less fortunate childhood friends in Gujarat, many of whom he bankrolled for years. And unlike many taipans he never tried whitewashing or obfuscating his humble beginnings. After Reliance entered the petroleum sector, he declared "I began pumping oil and my family has ensured I shall end by pumping more oil".