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- Mukesh Ambani’s Succession Plan | 217 billion dollar empire | To Take Over The Next Gen Reliance
a few moments agoAuthor: Devendra Adlak
Mukesh Ambani, the world’s 11th richest businessman, is working on a plan to hand over his Rs 16 lakh crore empire to the next generation. They want that after the death of father Dhirubhai Ambani, there should not be a dispute between his sons and daughter about the sharing of stake with brother Anil Ambani.
In such a situation, there will also be a question in your mind that how big is the business of Reliance in the country and the world? In which sectors is this business spread? Which businesses are Mukesh Ambani’s sons and daughters currently handling? On which model can Mukesh Ambani divide his empire? So let’s take these questions one by one and try to know their answers…
First meet the Ambani family
The foundation of Reliance Industries was laid by Dhirubhai Ambani. He was born on 28 December 1933 in Junagadh district of Saurashtra. Dhirubhai’s full name is Dheerajlal Hirachand Ambani. When he entered the business world, he had neither ancestral property nor bank balance. Dhirubhai was married to Kokilaben in 1955. They have two sons Mukesh-Anil and two daughters Deepti and Neena. After the death of Dhirubhai on 6 July 2002, his wife Kokilaben played a key role in the distribution of his property.
Akash-Isha and Anant
1. Akash Ambani: In 2014, took a degree in Economics from Brown University. After that he joined the family business. Jio Platforms, Jio Limited, Saavn Media, Jio Infocomm, Reliance Retail Ventures are on the board. Married to Shloka Mehta in 2019.
2. Isha Ambani: Studied at Yale and Stanford. Joined the family business in 2015. Jio Platforms, Jio Limited, is on the board of Reliance Retail Ventures. Isha got married in December 2018 to Anand Piramal, son of businessman Ajay Piramal.
3. Anant Ambani: Studied from Brown University of America. Reliance New Energy, Reliance New Solar Energy, Reliance O2C, are on the board of Jio Platforms.
How big is Reliance’s empire?
Reliance Industries Limited is a Fortune 500 company and the largest private sector corporation in India. Starting with Textiles and Polyester, the company’s journey has today expanded into Energy, Materials, Retail, Entertainment and Digital Services. Reliance has the world’s largest refinery at a single location. Reliance’s empire has grown to $ 217 billion today, that is, about 16 lakh crore rupees. This is more than the GDP of countries like New Zealand, Iran, Peru, Greece, Kazakhstan. Reliance is the largest payer of customs and excise duties in the private sector. Almost every Indian uses some or the other product or service of Reliance.
Interesting things related to Reliance’s business
- Reliance has Asia’s largest mango plantation in Jamnagar. There are about 1 lakh trees and more than 100 varieties of mangoes are grown here. This makes Reliance India’s largest producer and exporter of mangoes.
- Reliance is also associated with sports. In 2008, Reliance bought Mumbai Indians in the biggest league of cricket (IPL) for $100 million. Reliance started the Indian Super League of football. A tennis event is also organized by Reliance.
- Reliance is the owner of Network 18. RIL’s annual report for 2020-21 shows that one out of every two Indians watches TV channels from Reliance. Reliance also has a major stake in platforms like Money Control, Book My Show and Voot.
- Looking at the future of crypto, Reliance is also going to enter the crypto space. Reliance has started building India’s largest block chain network. Mukesh Ambani has mentioned the benefits of this technology many times.
- Reliance has the world’s largest petroleum refinery in Jamnagar, Gujarat. Reliance’s operations here span from exploration and production of oil and gas to manufacturing of petroleum products and other products.
- During the second wave of Corona, when the country was facing a shortage of oxygen, a large quantity of medical grade oxygen was made in this refinery of Reliance. 1000 MT of oxygen was supplied every day from the refinery.
- Apart from Reliance Digital, Fresh and Jewels, it also owns the toy store Hamley. Reliance has exclusive partnerships with international brands like Armani, Hugo Boss, Diesel and Marks & Spencer.
- In the online space, Reliance is the parent company of fashion stores Azio and Zivame, online pharmacy store Netmeds and popular furniture seller Urban Ladder. Through this, the company wants to give a great shopping experience.
- Talking about the technology space, Reliance has a long list from Live TV to UPI, but for future technology, Reliance has partnered with some companies of the country and the world.
- One of them is the American company Skytrain. Skytrain manufactures self-driving electronic vehicles. Its purpose is to make public transport easier. These little pods are run by magnets. This will get rid of the problem like traffic.
- Reliance has bought 51% stake in Bengaluru-based drone company Asteria Aerospace. This company makes such drones that can fly at high altitudes. These aerial views convert data into actionable intelligence.
- Reliance acquired a majority stake in augmented realty company Tesseract in 2019. It creates 3D experience in entertainment, teaching, shopping and gaming. After this Reliance launched Jio Glass.
- Mukesh Ambani is also setting his feet in the hotel industry. He recently bought New York’s iconic luxury hotel Mandarin Oriental. Earlier, he had bought Britain’s famous and iconic country club Stoke Park.
What was the reason for the tussle between Mukesh-Anil?
- Mukesh Ambani joined Reliance in 1981 and Anil Ambani in 1983. Dhirubhai Ambani died in July 2002. He did not go by writing a will. Mukesh Ambani became the chairman of Reliance Group and Anil Ambani became the managing director.
- For the first time in November 2004, the feud between the two brothers Mukesh Ambani and Anil Ambani came to the fore. Dhirubhai Ambani’s wife Kokilaben was upset due to this ongoing dispute in the family, after which the business was divided.
- This division took place in June 2005, but the decision of which brother will get which company lasted till 2006. VK Kamat, the then chairman of ICICI Bank, also had to intervene in this partition.
- After the partition, companies like Petrochemicals business, Reliance Industries, Indian Petrol Chemicals Corp Ltd, Reliance Petroleum, Reliance Industrial Infrastructure Ltd came in Mukesh Ambani’s share.
- Younger brother Anil owned companies like RCom, Reliance Capital, Reliance Energy, Reliance Natural Resources. Since then Mukesh Ambani is scaling new heights, but Anil’s mistakes drowned his business.
On which model can Mukesh Ambani split?
According to a report in Bloomberg, Mukesh Ambani is going to Walmart Inc. to share his wealth. Kay Walton can adopt a family-like approach. This model will help in maintaining the family’s control over the business. Ambani may shift family holdings to a trust-like structure. The trust will fully control Reliance Industries and the new company may consist of all family members including wife Nita Ambani and their three children, twins Akash (30) and Isha (30), and Anant (26). The whole family will jointly look after the entire empire. It may be a better option to divide the existing oil and petrochemical, telecom and retail businesses.
Neil Beveridge, analyst at Sanford C. Bernstein, says that if Reliance is able to do this, then there will be more potential for value creation and earning. Just as the earnings from oil refineries have helped make Reliance the country’s leading telecom company, so will the next generation of green energy, retail and digital businesses in the next decades. According to the company’s filings, the Ambani family’s current stake in Reliance Industries has increased to 50.6% from 47.27% in March 2019. The market capitalization of Reliance is $ 217 billion i.e. about 16 lakh crore rupees. According to Forbes, the net worth of Mukesh Ambani is $ 93.2 billion, i.e. about Rs 6.9 lakh crore.
How did Walton do the partition?
The Walton family owns one of the largest conglomerates in the world. Walmart, founded by American businessman Sam Walton, is now the world’s largest retailer. Sam began preparing the succession plan almost 40 years before his death in 1992. The Walton family handed over the company’s day-to-day business to the managers in 1988. Walton gave 80% of his business to his four children, Alice, Rob, Jim and John. According to new figures, the Walton family owns about 47% of Walmart.
What did Mukesh Ambani say about partition?
Dhirubhai Ambani’s birthday was on 28 December. On this occasion, Mukesh Ambani had said, ‘The young generation is now ready to play the role of leadership. Now I want to speed up the process of succession. We should guide the new generation. They should be enabled. They should be encouraged and sat and applauded.
Mukesh Ambani had said, ‘I can see and feel the passion, commitment and dedication of children for Reliance every day. I see in him the same fire and ability that my father had to make a difference in the lives of millions and contribute to the development of India. The time has come to take advantage of this huge opportunity and lay the foundation for the future growth of Reliance.
He had said, ‘Reliance started as a textile company. Now involved in many businesses. Its oil to chemical company is now number one in sectors like retail, telecom, e-commerce. We have also completely revamped our energy business, now Reliance is poised to become a global leader in clean and green energy and materials.
Reliance’s future and challenges
Reliance’s Jio Platforms Limited, which has partnered with Google, is in a strong position. However, Reliance’s road to retail is not easy. Reliance’s retail business is mainly facing competition from Amazon. The case for the acquisition of Future Group is stuck. At the same time, he will have to compete with Gautam Adani in New Energy. Adani wants to be the world’s largest renewable energy producer by 2030. Ambani has planned to invest 74.3 thousand crores in this sector in the next three years and has also expressed his intention by making several acquisitions.
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