The Story of Reliance Industries



The Legacy of RIL


While the entire world accredits a single man for the founding of India’s largest and the world’s 96th largest company – Reliance Industries, it was actually started as a partnership between Dhirubhai Ambani and Champaklal Damani in the early 1960s. The company was divided into 2, each headed by one of the two partners when the partnership broke apart in 1965. Dhirubhai continued the polyester business of the company under the name of ‘Reliance Textile Engineers Pvt. Limited’ (incorporated 1966) and today Reliance Industries is the largest producer of polyester in India.

The synthetic fibers mill in Naroda, Gujarat was also set up in 1966. The name ‘Reliance Industries Limited’ was officially registered in 1985. The company expanded in the textile business under its clothing brand ‘Vimal’ which till date, stands as a reputed brand with a broad consumer base in the Indian market. Currently, Reliance Industries hold 51% stake in the brand making it the majority shareholder.

Reliance Industries launched its initial public offering (IPO) in 1977 introducing the equity financing method in India and the issue was oversubscribed by 7 times. An initial public offering is the first time issue of shares by a company for public to invest money in the company. This investment can either be in the form of share where the investors become owners of a part of the company (or preference shares wherein a fixed amount of dividend is paid to the shareholders).


The Company Grows (1977 – 2005)


After a successful and increased cash assets, Dhirubhai Ambani along with his sons – Mukesh Ambani and Anil Ambani pursued their dreams to expand the business of Reliance all over the country. This began with an early acquisition of Sidhpur Mills in 1979 followed by the setting up of a polyester yarn plant in Patalganga, Raigad in Maharashtra in collaboration with. E. I. du Pont de Nemours & Co., an American Company.

In a period of 7 years from 1985-1992, the company increased its polyester production capacity by 1,45,000 tonnes per annum which gave a major boost to the its textile business. Subsequently, Reliance also entered the petrochemical business and the significant Harzira petrochemical plant was established in 1992. 

After the liberalization of trade and allowance foreign investments in India in 1991, Reliance issued global depositary receipts (GDRs) to international investors to invest funds in Reliance Petroleum. The company went on to become the first Indian private company to receive an international credit rating by Standards and Poors in 1996).

But this was only the beginning of RIL’s expansion plans. Reliance Telecommunications was set up in 1996 as a joint venture with the American company NYNEX and started dealing in LPG cylinders from 1998 onwards under the brand name ‘Reliance Gas’. Subsequently, the Jamnagar integrated gas plant was set up which is, till date, one of the largest oil refineries in the world. This plant was supported by RIL’s discovery of approximately 1.2 billion barrels of oil in the Krishna – Godaveri basin.

This growth progress was supported by a series of acquisitions and plant set ups giving a major boost to Reliance’s revenues and making it one of the largest companies in the country. However, the 2 heirs to the business empire – Muskesh and Anil Ambani have had a spat since their father’s death in 2002. In order to resolve the feud, their mother demerged the various sectors of the business, distributing them between the two brothers.


What Is Reliance Industries Today?


Reliance Industries is the most valuable company in the Indian market with a market capitalization of more than Rs. 14,00,000 crores and is headed by Mr. Mukesh Ambani. The part of the business owned by Mr. Anil Ambani had declared insolvency in 2019 after which Mukesh Ambani bailed out his brother by paying $400 million regardless of the severe tensions, defamation suits, accusations and pubic insults over the years since the split in December 2005.

Reliance Industries has undertaken aggressive business expansion plans in the midst of the COVID-19 pandemic when most of the companies are losing money. As of May, out of the total international investments of $30 billion made in the telecommunication industry, more than half ($15 billion +) were attracted by Reliance Industries alone.

In the recent months, Mukesh Ambani has been able to attract large investors like Facebook, Google, Silver Lake and KKR to invest thousands of crores, first in the telecommunication business through Jio and then into the retail business through Reliance Retail Ventures Limited. Ambani plans to expand the company’s retail business through a new brand – ‘Jio Mart’ and has also promised the introduction of 5G network in India through Jio which will be totally locally made.

In addition to these, at the Annual General Meeting of Reliance Industries, Isha Ambani (daughter of Mukesh Ambani) introduced the ‘Jio Glass’ – a pair of smart spectacles with in – built technological functions. Mukesh Ambani has also advanced his position on the list of world’s richest persons with his aggressive expansion policy and currently is the 5th richest person in the world. In addition, Forbes listed Reliance Industries as the 96th largest company in the world in its most recent list of the world’s largest Fortune 500 companies, 2020.


Written by - Arnav Mehra

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