How Reliance has transformed India's business landscape

Growth is life. Life is growth. Dhirajlal Hirachand Ambani — also known as Dhirubhai — died on July 6, 2002. India has grown since then; so has Reliance Industries. The story of Dhirubhai and Reliance are tightly woven together by the same yarn. New strands are being added rapidly.

Reliance has come a long way since its past. It began as fibre. It is now growing itself into fiber — Jio Fiber. Some parts of the fibre in its digital network are not visible. But the wireless fiber is present inside the fabric or the network that Dhirubhai’s son, Mukesh Ambani, is weaving.

Unusual beginning

Dhirubhai began with yarn and then fabric. It was Reliance’s “Only Vimal” that grabbed the nation’s attention. Dhirubhai understood what India needed; and what Reliance needed. He took off on a backward integration adventure, blitz and binge. His yarn needed fibre.

Natural fibre needs organic chemicals, soil, water and manure. Dhirubhai knew cotton’s yield limitations. Cotton is an expensive fibre in the task of providing adequate lengths of fabric to clothe the millions. India needed inexpensive fabric. Dhirubhai chose inorganic chemicals and synthetic fabrics.

India needed style, too. Reliance understood style. It had to flourish as a customer-facing business-to-consumer (B2C) business. There is a big management lesson here for storytellers and strategy experts.

India had won the Prudential Cricket World Cup in 1983. The first three editions were held in England in 1975, 1979 and 1983. All three were sponsored by Prudential, a British global insurance group born in 1848.

Dhirubhai seized the moment and won the right to sponsor the 1987 Cricket World Cup in India, for the country and for the world. Reliance’s route to substance and style in its massive B2C entrepreneurial effort was cricket. The 1987 Championship was played in India and Pakistan. The final was played at the magnificent Eden Garden in Calcutta (now Kolkata) on November 8, 1987.

Dhirubhai handed the Reliance Cricket World Cup to Allan Border, the captain of the winning Australian team. Border batted extremely well and got two wickets. The first one remains unforgettable — he got the wicket of Mike Gatting, the captain of the losing team from England. Gotcha!

It is not a coincidence that Reliance’s door to a borderless world was opened by Allan Border. The 1987 Reliance World Cup was the last cup that could be sponsored. Reliance had arrived as a B2C company.

Growth of the business

Now, it is on to bigger adventures. Reliance Jio and Jio Fiber are the latest and the biggest. Perhaps, they are equal; so let’s unify them. Reliance Jio Fiber is the latest and the biggest.

Hence, fibre and fiber are the same as well. Yarn, thread, fibre, fabric, fiber and network are all the same, depending on how you see them. Fibre to fiber is the manifestation that determines what we see. Fibre to fiber is the determination of what the manifestation is.

Dhirubhai and Reliance make up a fine yarn, a story, an elaborate narration of a real adventure. A yarn becomes an epic when the hero goes the long distance. When Dhirubhai passed away in 2002, Reliance had entered the communications and information business. Refining was in its backyard.

It had taken deep a backward integration, as far back as possible. It became the world’s largest refiner of crude oil. That deep backward integration then pushed it into deep forward integration. Reliance is now in the big business of fuels.

A yarn becomes an epic. Then an epic becomes a saga. Reliance has become a master of deep backward integration and deep forward integration. Reliance owns the fabric and the network — end-to-end. There are no loose ends.

Reliance is B2C on the outside, but B2B (business-to-business) on the inside. Its managerial activities and the accomplishments through cost centres, revenue centres and profit centres are breath-taking, buzzing and borderless.

ESPN Cricinfo says that Allan Border is the epitome of the fighting Australian. Dhirubhai was the epitome of the fighting capitalist. Reliance is the epitome of the efforts of capitalism.

There is the extraordinary past. There is the gargantuan present. There is an exciting future. We can make whatever yarn we wish to make of these. All three are about the flow of time in its long journey. It is as if time wraps itself along the Reliance warp.

The warp in a fabric is the yarn that goes the distance. It goes metres and metres to make up the tale and the bale. The weft is the yarn that defines the moment.

Rise and rise

Let us imagine Dhirubhai walking along with us in this moment. He would be very happy. Reliance is now in three game-changing industries: fuels and feedstock; mobile telephony and broadband; and retail. Reliance has served India by bringing optimism and opportunities in gigantic barrels. It has served the citizens of India. It has over 2,00,000 employees and supports the enterprises of over 20 million self-employed Indians.

India’s gross domestic product (GDP) has grown six times since 2002, or from $0.5 trillion to $3.2 trillion in 2020. Reliance earns $18 billion in revenues. Its revenues have risen 12-fold since 2002. Its market capitalisation has grown at least ten times in the same period.

Reliance exports petroleum products. Its Jamnagar refinery has a capacity of 1.24 million barrels per stream day. Reliance Retail is set to become the biggest retailer in India. It has over 3,800 retail outlets.

Reliance owns a clutch of powerful brands — Reliance Fresh, Reliance Smart, Reliance Digital, Reliance Trends, Ajio and Jio Mart. Reliance has disrupted many businesses with Jio Platforms. In merely four years, Jio has added 387.5 million subscribers and has over 34 per cent of the market. Jio earns $2.4 billion in revenue.

Reliance is a celebration of the owner-driven public company. The Ambani family owns more than 45 per cent of the shareholding. This extraordinarily big inside holding is the perfect antidote to ‘agency costs’. The other shareholders of Reliance admired Dhirubhai. He belonged to them. They belonged to him. They were cut from the same cloth. They wore the same clothes.

Reliance has combined enterprise, leadership, ownership and management. Its ownership and management practices have for long been the envy of many European and American corporations. Reliance’s corporate ownership and management practices have been discussed since the time it chose to issue its global depository receipts in May 1992. The world’s most demanding shareholders — the institutional shareholders, in particular — knew of Reliance’s strengths since 1993. Twenty-seven years later, more and more of them are rushing to invest in Reliance.

The writer is founder of CreaSakti

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