RISE AND FALL OF ANIL DHIRUBHAI AMBANI

Introduction:
Anil Ambani is one of the highly educated Billionaires that we have in the present world. His
educational qualifications are excellent. He pursued his Bachelor’s degree in Science from
the University of Mumbai, and later went up to USA for his Master’s in Business
Administration at The Wharton School, University of Pennsylvania. He was born in the year
1959. He is an Indian Business man and Chairman of Reliance Group (also known as
Reliance ADA Group) which was created in July 2006 following a demerger from Reliance
Industries Limited.

After the death of his father Dhirubhai Ambani in 2002, Rs 28000Cr Reliance empire
was divided between two brothers. Mukesh got Oil Business, The Reliance Industries
Limited (RIL) and the Indian Petrochemicals and Anil got the Telecom business. He also got
Reliance Energy, Reliance capital, Reliance Natural Resources.

RISE OF ANIL AMBANI:

 In the year 2005 when both brothers got separated Anil was given Reliance Capital,
Reliance Infrastructure, Reliance Power and Reliance Communications which were
listed companies.
 With the consolidation of his telecom companies in the year 2006 Anil Ambani was a
step ahead of Mukesh Ambani in net worth of about 550Cr which led him to be
the 3rd richest Indian after Laxmi Mittal & Azim Premji.
 In 2005, he bought Adlabs Films.
 In 2006, he was the 6th richest person in the World.
 In 2008, he signed $1.2billion deal with Steven Spielberg’s Dream works, and also
entered in to Infrastructure business.
 In 2008, Forbes estimated the net worth to be $42billion.
 His business interests in entertainment industry has led him to start 44 FM radio
stations, animation studios, nationwide DTH business and several multiplex cinemas
throughout India.
 He was also credited with India’s largest IPO [Initial Public Offering], that of
Reliance Power, which in 2008 was subscribed in less than 60 seconds, which is the
fastest in the history of Indian capital markets to date.
FALL OF ANIL AMBANI:
He had reached the pinnacle of success. But in 2014, disaster hit home and now he is
longer a billionaire

FALL OF ANIL AMBANI IN DIFFERENT SECTORS:

 Reliance power ltd has failed to avoid a decade of overall decline in its shares since
2008. This is a Global phenomenon in the power sector.
 He invested Naval and Defense but he didn’t have a company which generated cash
like Reliance, so many of his investments increased his debts and this debt mounted.
 When the banks called for repayment Anil had to sell assets, as investors were
concerned due to mounting debts which contributed to declines in his share prices.
 Reliance Naval and Engineering lost 75%, proving hard to make a comeback to
former position. His loan accounts were irregular and substandard since 2014.
 But the Big blow came from the family when elder brother Mukesh launched
Reliance Jio in telecom sector in 2016, where he had to sell 178000 km fibre optic
network to Jio for 3000Cr and exited the mobile phone business.
RELIANCE COMMUNICATIONS:

The journey….

R eliance Communications was launched in the year 2002 on 31st July. In the
year 2002, when using a mobile phone was a luxurious good, Reliance
communications launched a mobile for Rs 5000. Later due to increase in
competition in the market they reduced the price of the mobile and in addition launched
attractive offers for the customers and new business models.

In the year 2006 Reliance Communication has come under the ownership of Anil Ambani
upon separation with his elder brother. Reliance communications limited was an Indian
mobile network provider headquartered in Navi Mumbai that offered voice, 2G and 3G data
services in the year 2004.

Reliance communications introduced its nationwide CDMA2000 services and has

become Reliance Communications limited in the year 2006. [CDMA - Code Division
Multiple Access2000 is a third generation[3G] standard developed by International
Telecommunication Union. This protocol uses CDMA access to send voice and data signals
between mobile phones and cell sites]

The company introduced its GSM [Global system for mobile communications]
services in 2008. In 2010 spectrum auction, Reliance obtained licenses for 3G spectrum in
three cities at a total licensing fee of Rs 58642.9 million

It began using MIMO technology in 2011 to improve the quality of its 3G services.

HOW THE TROUBLE STARTED….

Sectoral stresses such as price wars, heavy debt and plunging profitability led to
downfall of Reliance communications.

Increase in demand in telecom sector, needed heavy investments which he couldn’t make up.

 The market was shifting from 2G voice, then to data and internet heavy 3G and 4G.
This required heavy investments in telecom equipment and also in spectrum
purchases.
 He also had to fight off the so-called GSM lobby that comprised the combined might
of Airtel, Vodafone and idea cellular.
 The pressure of competition and heavy investments started showing on the company
eventually increasing the debt.
 The failure of deals collapsed Rs 50000 Crore telecom infra deal with GTL infra in
2010. And deal between Aircel and Reliance communications.
 It also announced closure of 2G and 3G mobile business, leading to shaving off of 75
percent of customers [ 80 million customers]
  In the year 2016, company ended its CDMA operations and in the same year his
brother Mukesh Ambani launched Jio. In order to remain in the competition Anil
introduced data pack to compete with the market. Even though he introduced lot many
offers and data packs he couldn’t withstand.
 He had total debt of 40000Cr which he had to pay to china bank and 38 other
financial institutions, finally in the year 2018 Reliance communications quit from
telecom sector because of heavy losses. He announced that he wanted to quit totally
from telecom sector and progress towards real estate.
Mukesh Ambani’s Jio, high debt and some bad decisions led him exit the Telecomm
sector.

Could Reliance communications have done something different?

Analysts say Reliance communications had many assets with them, but it did not time the
sale right.

And it was offered over Rs 30000Cr by Tillman and TPG for its tower and fibre assets
about four years ago. If he had sold the assets earlier his debts would have been decreased to
some extent.

Later he made a deal with Jio were the assets valued at Rs 8500 crore only. He had faced the
same situation with other companies as well.

BUT FOR A BUSINESSMAN PROBLEMS NEVER END...

 In February 2019...... The Supreme Court said he would face jail if his company did
not pay Rs550Cr dues... to Swedish firm ERICSSON.
 But he did not have money. Fortunately, his brother Mukesh bailed him out.
 But Anil’s problems haven’t ended. He still has a lot of dues to clear. In March 2018,
the total dues were Rs 1.7lakh crore.
 Recently he said Reliance Group paid Rs 35000Crores of loans in 14 months.
 He also sold his stake in Reliance Nippon which was his biggest asset worth
Rs13500Cr.
 His net worth has dropped from $42 billion to $0.5 billion in the past 11 years and his
net worth is less than the value of Mukesh Ambani’s house Antilia which is estimated
to be over a billion dollars. That’s the story of Anil Ambani....
 THE FALL OF A BILLIONAIRE.....

Source: https://en.wikipedia.org/wiki/Anil_Ambani

https://www.youtube.com/watch?v=KJxHjwP58mI

https://m.economictimes.com/industry/telecom/telecom-news/from-glory-to-dust-an-ambani-
brands-journey-to-bankruptcy/articleshow/67837769.cms

https://en.wikipedia.org/wiki/Reliance_Communications

https://www.indiatoday.in/magazine/the-big-story/story/20190325-the-fall-of-a-billionaire-
1477813-2019-03-15