Where Does Mukesh Ambani Net Worth Come From?

 The richest man in India for eight consecutive years and for a quick time in 2008 a contender for the title of richest man within the world, Mukesh Ambani is that the current chairman and director of Reliance Industries. he's the eldest son of Dhirubhai Ambani, the founding father of Reliance Industries, one among the most important private companies in India, with interests in refining, oil & gas, petrochemicals, telecom, retail and media. Mukesh Ambani owns approximately 45% of Reliance Industries, making his net worth approximately US$ 24 billion. Mukesh and his younger brother Anil had been jointly running the business while their father was alive. In 2005, the business was split between the 2 brothers, with Mukesh retaining the oil and gas business and Anil holding on to telecom, infrastructure and finance. 

To understand the might of Reliance Industries, the numbers are an honest start. Its petroleum refinery in Jamnagar, Gujarat, is one among the most important within the world, with 2% of worldwide processing capacity. It also constitutes 15% of India’s exports, 4% of its stock exchange capitalization and three of its tax revenues and is that the country’s largest private company . (See article: An Introduction To The Indian stock exchange .) it's also the world’s largest producer of polyester and yarn.

Mukesh Ambani holds a Bachelor’s degree in Chemical Engineering from the University of Mumbai and was pursuing his MBA from Stanford University when he dropped bent assist his father within the construction of a polyester filament yarn plant after it got a license from the Indian government in 1981 to supply polyester filament yarn, beating the likes of other well-known Indian business houses like the Tatas and Birlas.

Reliance was founded in 1957 by Dhirubhai Ambani as a provider of textile yarns to textile manufacturers. He then decided to enter textile manufacturing within the mid 1960’s and found out his first factory in 1966. the shortage of a correct distribution arm, which was necessary to avoid dependence on the prevailing players and to stay costs low, along side a shortage of funding led Reliance to return out with an IPO in 1977, raising US$ 1.8mn and within the process starting the capital markets culture in India. (See: IPO Basics: getting into On An IPO.) Mukesh Ambani officially joined Reliance in 1981 and oversaw its backward integration from polyester into textiles then into petrochemicals in 1986 and later into oil & gas exploration, and more recently into other unrelated sectors.

A new petroleum subsidiary was found out in 1991 and its IPO was launched in 1993, making it India’s largest ever IPO at that point . the corporate also issued Global Depository Receipts (GDR’s) in 1993-94 in Luxembourg, becoming the primary ever Indian company to try to to so. In 1997, Reliance got permission to create its petroleum refinery at Jamnagar, which was commissioned in 1999. within the same year, Reliance won 12 oil blocks for exploration within the Krishna-Godavari Basin (KG-D6) within the Bay of Bengal. It also expanded into the telecom sector in 2002 while at an equivalent time expanding its refining operations.

Mukesh’s period at the highest saw revenues increase quite 6 times and profits increase around 3 times since 2005. However, the stock of Reliance has been languishing for the past 2 years, partly thanks to corporate governance issues and its opaque corporate structure, resulting in some people calling it the most important wealth destroyer within the country. The expected output from the KG-D6 basin wasn't as high needless to say and this has led to the company's efforts to urge a better price from the govt for its gas. (See: How Does petroleum Affect Gas Prices?) the corporate is additionally losing the general public image battle, with accusations of crony capitalism and every one the bad press related to it. There have also been some serious allegations that Reliance is in a position to use its political connections to rig the system to urge favorable deals.

Mukesh’s forays into retail, 4G wireless broadband and media clearly signal areas of future growth for Reliance. it's already started a web service for its brick-and-mortar grocery business, Reliance Fresh. (For related reading, see: Why 'Bricks and Mortar' Retail Remains A Solid Bet.) it's additionally entered the fiercely competitive telecom sector again with its 4G broadband venture. The acquisition of Network 18, a television company in India owning a variety of TV channels, created tons of furor within the country over Reliance’s intentions and whether it wanted to curb press freedom in India by trying to strangle any negative publicity against it within the media. From a business perspective, it fits into its strategy that aims at providing content for its 4G consumers. it's also bought stakes in a web tutoring company to expand the services it can deliver via 4G.

Severe criticism has been levied against Mukesh personally for his 400,000-square-feet range in Mumbai, a palatial house with 27 floors worth US$1 billion, and for showing insensitivity towards the massive number of poor people living in India. Though always known to be a personal one that shied faraway from the media, he entered the limelight in 2008 when he a bought a Mumbai cricket team within the newly formed Indian Premier League.

The Bottom Line

Reliance as a corporation has not been a technologically disruptive organization, but by adopting the foremost modern technologies and processes and by fixing place proper systems it's been ready to build a strong supply chain and achieve significant economies of scale. there's little question that Mukesh Ambani has expanded and solidified the business created by his father, to a bigger extent than his brother. Dhirubhai Ambani overcame tons of odds to determine Reliance during a country that was perceived as anti-privatization and favoured the established order . But it's also fair to mention that Dhirubhai to a particular extent did enjoy the license system in pre-liberalization India by gaming the system to his advantage. A number of those relationships still benefit Reliance even today, but the longer term definitely won't favor such businesses. to make sure that Reliance survives and flourishes on a stage that's increasingly global, Mukesh Ambani must make an excellent effort to enhance his and his company’s image.