Dhirubhai Ambani and Reliance

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In 1991, Dhirubhai embarked on his most cherished project at Hazira (Gujarat)-to build the largest single multi-feed ethylene cracker plant in the world. The plant produces ethylene (imported so far), propylene to make PP, xylene to make PX, benzene to make LAB. The Jamnagar plant commissioned in 1999, the world's largest refinery with a capacity of 27 million tonnes per annum, was the single largest investment ever made at a single location in India. Besides the refinery, the plant included India's largest port terminal, fully automated rail-road loading and product dispatch terminal, a 3.5 million tonne tank farm, a 500MW power plant, a 12 mgd sea water desalination plant, a 1000-giga byte IT network, connecting 50 servers and 2,500 terminals with 200 km long optic fibre cables. This plant accounts for over 25% of India's total refining capacity. The process of expansion revealed Dhirubhai’s interest in integrating vertically and concentrating on petrochemicals and other downstream products. Some of the characteristic features of the Reliance group were: (i) Continuous vertical integration; (a) From synthetic textiles into the manufacture of polyester fibre and filament yarn;

(b) From yarn and fibres to intermediaries like purified terephthalic acid and mono-ethylene glycol; and
(c) Further upstream into basic building blocks like paraxylene;
(ii) Consolidation of internal capabilities generated in this process through related horizontal diversification into petrochemical end-products such as detergent intermediates, for example, linear alkyl benzene (LAB), or thermoplastics like high density polyethylene (HDPE), low density polyethylene (LDPE), polyvinyl chloride (PVC), polystyrene (PS), polypropylene (PP) and styrene butadiene rubber (SBR - synthetic rubber) and their intermediates and basic building blocks; and
(iii) Efforts to complete this process of integration through investment in an NGL/naphtha cracker and in oil extraction itself.

The Stock Market Adventure

Dhirubhai's biggest contribution to the nation was the development of an equity culture. Having understood the psychology of the Indian capital markets and the mindset of Indian investors, he was instrumental in introducing the equity culture in India. Dhirubhai gave importance to the small investor and his contributions, and by doing so, he involved millions of middle class investors. Reliance went public in 1977 and had its first annual general meeting (AGM) in 1977. Reliance Industries had 58000 investors in 1977. So large was Reliance's investor base that at times executives had to go to small cities, with the share certificates, annual reports and other such correspondence, as personal luggage, and post them locally. Reliance holds the record for bringing out the single largest domestic issue of more than Rs 21 billion in convertible bonds for Reliance Petroleum in 1993. The market capitalization of Reliance was Rs 1.2 billion in 1980, which rose to Rs. 9.96 billion in 1990, and shot up to 96.2 billion in 1995, making Dhirubhai one of the richest men in the world. The end of the High Unit Value scheme of 1978 brought about a dip in the profits of Reliance. In spite of this, Dhirubhai declared a dividend of 27 %. Whenever Reliance needed money to fund its expansion purposes, Dhirubhai opted for a public issue. From 1979 to 1982, Reliance brought out several issues for different purposes like: financing a worsted spinning mill, modernizing its already existing textile mill, financing a PFY plant, and to overcome the bear syndicate crisis respectively.

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