m.b.a.-ii. contents 1.founder’s biography 2.world of reliance 3.sad incidence 4.ownership war...

M.B.A.-II

CONTENTS

1. Founder’s Biography

2. World of Reliance

3. Sad Incidence

4. Ownership War

5. Reasons

6. Settlement

7. Impact of issue

8. Conclusion. (Our Comments)

AMBANI FAMILY

FOUNDER’S BIOGRAPHY

LATE. DHIRUBHAI H. AMBANI

• Founder Chairman, Reliance Industries Limited, India

• December 28, 1932 - July 6, 2002

Some True Facts

• At the age of 17, worked for A Besse & Co. Ltd., the sole selling distributor of Shell products.

• In the year 1958 started his first company, Reliance Commercial Corporation, a commodity trading and export house.

In the year 1966 started the textile mill in Naroda, Ahmedabad.

In the year 1975, a technical team from the World Bank certified that the Reliance textile plant was "excellent by developed country standards."

In the year 1977, the company went public.

• Today, the Reliance Group has one of the largest family of shareholders in the world. With an investment of over Rs. 26,000 Crore (US $ 9 billion) in petroleum refining, petrochemicals, power generation, telecommunication services and a port terminal

• Total Revenues More than 1,00,000 Crore (In 2005 $ 20 billion)

• In year 2005 revenue growth 29%

• Profit of Rs 12,500 crore (Before tax)

• Net profit of Rs 6,200 crore

• Exports of Rs 15,900 crore

1.Reliance Industries Ltd.

India's largest private sector company

2.Reliance Capital Limited

3.Reliance Capital Mutual Fund

4.Reliance Industrial Infrastructure Limited

5.Reliance Energy

6.Reliance Telecom

7.Reliance Infocom

8.Reliance Life Sciences

9.Reliance General Insurance Co. Ltd

10.Indian Petrochemicals Corporation Ltd

Some Facts About Reliance

• Reliance Group Revenues are nearly 3.5% of India’s GDP

• 1 out of 4 investor in India is a Reliance Shareholder

• Reliance Group contribute 10% of Indian govt. indirect tax revenue

• Reliance Group contribute 6% of India’s Total Exports

• Reliance Group contribute 17% of the profit of entire corporate sector in India

• Reliance is the first and only fortune 500 global company of India

No one was aware of that the black cloud will struck the reliance empire.

And the black cloud loomed large………

SAD INCIDENCE

• On June 24,Dhirubhai Ambani,

suffered a cerebral stroke,

lost consciousness, and lay near death in a Bombay hospital

The Young Ambanis

Mukesh Ambani Anil Ambani

The New BOD• Chairman & MD: Mukesh Ambani

• Vice Chairman & MD: Anil Ambani

&Six Directors and Three Company Secretaries

Ye Meri Hai…….

• Mukesh Ambani was on CNBC news Channel.

• CNBC asked:

Is Their Any Coral Between you and Anil

about any problem?

• Mukesh replied :

Yes, OWNERSHIP ISSUES………..

• Battle Start from here.

• War took 7 months to Resolve.

• Between 7 Months, They Forgot that they are BROTHER.

The 7 Months ride

• Nov. 22 Mukesh tells employees Dhirubhai had settled

issue during his lifetime, Anil turns to Mother Kokilaben to settle dispute.

• Nov.23 Mukesh says CMD’s word is final.(I AM THE

BOSS) M.L. Bhakta resigns from Reliance Board.

• Nov. 25

6 Reliance’s directors resign from Board.

• Dec. 5

Mukesh offers Anil. Reliance industry,RCL,and cash.

• Dec. 6

Anil Rejected offer.

• Dec. 6

Newspapers report that Mukesh got 12% Sweat Equity in RIC.

• Dec. 20

Amitabh Jhunjunwala resigns as RIL.Treasurer.

• Dec. 23

Mukesh Ambani return Sweat Equity in RIC.

• Dec. 27

RIL board clears Rs.3,000 Crore Buyback Shares .Anil opposes this.

• Jan. 3, 2005

Anil Resign from IPCL.

• Jan. 7,2005

Finance Minister tells Ambanis to settle dispute.

• Jan. 19,

Jhunjunwala’s resignation accepted,Four others withdraw letters.

• Mar.9,

K.V. Kamath completes Valuation of Reliance.

• April 8,

Anil Complains that his Phones are being Tapped

And finally

• June 18 ,2005

MOTHER KOKILABEN ANNONCED

THE SETTLEMENT OF THE DISPUTE

BETWEEN HER TWO SONS .

REASONS

• Dhirubhai’s death without making the will statement.

• Authority Power With Mukesh.• Anil’s love with U.P.

• More belief on other persons. • Poor corporate Governance.

Settlement

• June 18, 2005 News Every where. • Finely Mother Kokilaben settle the dispute between two sons.• With the help of Mr. K.V. Kamath, a family

friend and Managing Director of ICICI India’s bank.

WHAT WAS IT……………?

EMPIRE BROKEN

PROPERTY DISTRIBUTION

• Mukesh 30%

• Anil 30%

• Kokilaben 30%

• Sisters 10%

(Nina Kothari &

Dipti Salgaokar)

MUKESH

ANIL

Kokilaben

sisters

MUKESH ANIL

• RELIANCE INDUSTRIES LIMITED

(RIL)

• INDIAN PETROCHEMICALS CORPORATION

• RELIANCE ENERGY LTD.(REL)

• RELIANCE CAPITAL

LTD.(RCL)

• RELIANCE INFOCOMM.(RIC)

Mukesh Ambani’s Reliance Group

• RELIANCE INDUSTRIES LTD.

• TURNE OVER

Rs. 73,164 CR.

• NET PROFIT

Rs.7,572 CR.

• RESERVE

Rs.36,280 CR.

• EPS

Rs.54.20

• MARKET CAP.

Rs.11,996 CR.

• INDIA PETROCHEMICAL CORPORATION

• TURNOVER

Rs.9,386 CR.

• NET PROFIT

Rs.786 CR.

• RESERVES

Rs.2,672 CR.

• EPS

Rs.31.65

• MARKET CAP.

Rs.4,149 CR

Anil Ambani’s ADAE• RELIANCE

ENERGY LTD.

• TURNOVER

Rs.4,131 CR.

• NET PROFIT

Rs.520 CR.

• RESERVES

Rs.4,834 CR.

• EPS

Rs.28.06

• MARKET CAP

Rs. 11,996 CR

• RELIANCE CAPITAL LTD.

• TURNOVER

Rs.296 CR.

• NET PROFIT

Rs.106 CR.

• RESERVES

RS. 1,310 CR.

• EPS

Rs.8.31

• MARKET CAP.

Rs.4,348 CR.

• RELIANCE INFOCOMM

• TURNEOVER

• Rs. 5,387 CR

• NET PROFIT

• Rs.51 CR

• its stock fall by 3.4% in one day

• The group's market capitalization Lost by $ 550 million • Six directors of Reliance Energy quit

• Loss of synergy value.

• Hon’ble F.M. Mr. P. Chidamrabam said that “it will effect on indian business”

• Lost the experienced man power in top level management.

•Losing Faith

Among The Shareholders

MUKESH’S SWOT ANALYSIS

• STRENGTHS Phenomenal project implementation skills & ability to think big. Never say die, he has spirit like father.• WEAKNESSES Over Dependable on some people. is said to be whatever CHAMCHAS said it is final.• OPPORTUNITIES Huge growth potential in refining business with healthy margins. Healthy cash flows will allow him to think even more

ambitiously.• THREATS Lack of Professionalism in his group may prove to be costly. Reliance as a pure play becomes susceptible to industry cycle.

ANIL’S SWOT ANALYSIS• STRENGTHS Huge ability to raise the fund. Possesses a strong marketing orientation Said to be very good at handling the govt.& Politicians- his status as

M.P. will only make things easier.• WEAKNESSES Limited exposure to project implementation. Limited Technology Skills. Said to be very impulsive in nature.( like ego)• OPPORTUNITIES His Three business TELECOM,POWER & FINANCIAL SERVICES-

are all on a high• THREATS Eroding levels of customer faith in RIC Close ties with the SAMAJWADI PARTY & AMITABH

BACHCHAN may cramp his style under present situation.

Coming soon By Reliance

• Double the Jamnagar refinery’s capacity to 60 million tonnes per year with a Rs. 25,000 cr.investment.

• Expand oil and gas exploration and production with a Rs.17,000 cr. Investment.

• Expand polyester capacity by adding a new factory with a Rs.7,400 cr. Investment.

• Explore 10 new oil & gas discoveries.• 700 Malls all over INDIA.

Conclusion ( Our Comments)• Today the ultimate aim of the business is the

only profit.• No relation exist when the money comes amidst.• Reliance was too an example to illustrate the

founder of any of the companies to complete the will before they are dead.

• Until you make loss to others , you can not make your own profit.

• If you want to survive ,addict to betray

deceive and flirt.

Let’s hope……….For a better tomorrow.