Entp Finall_dhirubhai Ambani

8/7/2019 Entp Finall_dhirubhai Ambani

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By

Dolly Basantani 06

Swati Dadheech 09

Nehal Kotecha 38

Hitesh Mulchandani 60

Prof. Minu Mehta

Entrepreneurship

"DHIRUBHAI AMBANI & HIS WAR AGAINST

THE INDIAN CLOSED ECONOMY"


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INDIA SHININGy Indias Ranking in Doing Business 2008

y Starting a Business -111

y Dealing with Licenses -134

y Employing Workers -85

y Registering Property -112

y Paying Taxes -165

y Trading Across Borders- 79

y Enforcing Contracts -177

yClosing a Business -137

(Source: Doing Business, World Bank, 2008)


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NOT SO SHINING.y The Industrial policy resolution Industrialization under

government regulation

y

Wide Array Of Physical Controlsy Industrial Licensing

y Public Sector Policy

y FERA

y

MRTP Acty Industrial Location Policy


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We killed at birth any hope for an industrial

revolution

y Unnecessary Govt. Interference

y Delays In Investment Decisions

y Bureaucratic Red Tapism

y Corruptiony Fostered Monopolies

y EncouragedUneconomic-scale Plants

y Second-rate Technology

y Uncompetitive Locations

y Discouraged The Entry Of Efficient And Honest Entrants


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The world, they say, steps aside for the

man who knows where he is going

y A man far ahead of his times, he epitomized the dauntlessentrepreneurial spirit

y Dared to dream on a scale unimaginable before in Indian

industry.

y Backed by confidence, courage and conviction, man canachieve the impossible

y From a humble beginning, he went on to create an

enviable business empire within a span of just 25 years

y The Rs.60,000 crore Reliance Group is a living testimonyto his indomitable will, single-minded dedication and anunrelenting commitment to his goals


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Start of a historical journey

y Moved to Aden as a teenager in order to seek his fortune.

y Started work as a petrol station attendant

y Took up a clerical position for an oil company that was the

sole distributor of Shell products there.

y This was the era of Indias infamous license-permit raj,

when businessmen with political connections could corner

export, import and manufacturing licenses and accumulate

huge fortunes.


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Contdy To learn the tricks of the trade he offered to work free for a

Gujarati trading firm

y Learnt accounting, book keeping, preparing shipping papers an

documents, and dealing with banks and insurance companies

y Began speculating in high seas purchase and sales of all sorts ofgoods

y

Borrowed as much as he could from friends and small Adenshopkeepers

y "Profit we share and all loss will be mine" became his motto


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Back To Indiay Towards the end of 1958 Dhirubhai landed at Bombay with little money in his pocket

y Launched himself as a trader in spice setting up office under the name of RelianceCommercial Corporation

y Government scheme in the mid-sixties for import of nylon yarn, then much in demand,

against export of rayon fabrics

y He took to export of rayon fabrics in right earnest

y Began playing with the idea of establishing his own independent manufacturing unit

y

Opportunity in the textile industry higher disposable incomes were leading to Indiansbuying better, more expensive clothes

y Thus sought and received the necessary clearances to manufacture cloth from polyesterfibre.


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y Rather than turning to the banking system, he decided to tap the Bombay Stock

exchange.

y Reliance Industries, which went public in 1977 with one of the largest public offerings of

its time

y Subsequently diversified into chemicals, gas, petrochemicals, plastics, power and

telecom services

y Had a keen sense of business with a razor-sharp ability to negotiate through the Indian

political system

y He is credited to have brought about the equity cult in India in the late seventies and is

regarded as an icon for enterprise in India


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What led to the growth..?y By the late 1980s the Reliance group was one of Indias most influential and

profitable concerns.

y The phenomenal growth of Reliance owed to :

y Ambanis acumen and

y to the ease with which he was able to get official rules and regulations

including import tariffs introduced, amended or scrapped in order to

undercut his rivals and push his own business interests.

y His methods earned him many bitter enemies in Indias corporate world.

y Ambani nevertheless forged ahead, cultivating friends in virtually every Indian

political party and managing the media in such a way that critical stories about

Reliances unconventional business methods seldom made it into the

newspapers.


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I M - POSSIBLEy Set up a Polyester Fibre Yarn factory with a capacity of 10,000

tonnes the entire market in India only 6000 tonnes

y Unusual theory believed in providing supply which created

demand automatically

y In 1990s BJP government weakened Ambani managed stay

from the proceedings of the custom cases Congress Party

y With the support of West Bengal Chief Minister Jyoti Basu set

up a big new polyester factory in the state Reliance Bengal


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I M - POSSIBLE

y Converted the non convertible portion of the debentures

into equity & reserves legally impossible

yBecause of this brilliant and unconventional move instead ofan annual interest bill of Rs.96.5 m dividend burden was

only Rs. 36 m

y With this step, reliance made significant contribution to thegrowth of the debenture market through its successive issues

of convertible debentures


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I M - POSSIBLEy Dhirubhais cultivation of indira & other congress members during

janata period

y In October 1980, reliance received one of three licenses given by

govt for manufacture of polyester filament yarn, the location being

stipulated as backward area of Patalganga in hills of Maharashtra

y In the field of 43 contestants for the licenses, reliance beat many

larger and longer established business houses including Birla

y Negotiated permits from govt to import technology from du pont,

American chemicals giant in US for its polyester plant


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Criticism

y Despite his almost Midas Touch, Ambani known for flexible values andan unethical streak running through him

y His biographer himself has cited some instances of his unethical behavior

when he was just an ordinary employee at a petrol pump in Dubai.

y Accused of having manipulated government policies to suit his ownneeds, and has been known to be a king-maker in government elections.

y Although most media sources tend to speak out about business-politicsnexus, the Ambani house has always enjoyed more protection and shelterfrom the media storms that sweep across the country.


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Some of his quotes


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Truly men like Dhirubhai Ambani are rare.

They come gifted with the power and the vision to change

nations, to alter the course of corporate history.

They are the empire builders, the stuff that legends are madeof.

The legend called Dhirubhai Ambani will never die. Hisspirit will live on forever.


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THANK YOU

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Entp Finall_dhirubhai Ambani

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