Anil Ambani is a popular name in the Indian business. Son of well-known entrepreneur Dhirubhai Ambani and brother of billionaire Mukesh Ambani, Anil’s entrepreneurial journey has been a roller coaster. Today, he is cited as an example of riches to rags.
Let us have a look at his life and career.
Born on June 4, 1959, to Kokilaben and Dhirubhai Ambani, he completed his graduation in Physics and Electrical Engineering at the Scottish Church College in Calcutta. He did his post-graduation at Stanford University.
Back when after inheriting his wealth from his father, Anil Ambani was the sixth richest person in the world. He was the chairman of Reliance Anil Dhirubhai Ambani Group (Reliance ADAG). Under this came, Reliance Communications, Reliance Capital, Reliance Power, Reliance Infrastructure, Reliance Naval etc…
The fall of Anil Ambani stems from the feud between the Ambani brothers soon after the demise of their father in 2002. Since he died without writing a will, it caused complications within the Ambani family. Although the brothers seemed to be in sync initially, later the relationship between them strained. Mukesh, who was the Chairman of the company, viewed himself as the leader of the conglomerate. Anil, who was the Managing Director, saw himself to be equal.
Gradually, the quarrel escalated to a point where each took decisions for the company without consulting the other. Two years after the death of their father, Mukesh passed a resolution which made him the ultimate authority of the company. This public humiliation led to the split of the brothers. Their mother Kokilaben intervened and solved the dilemma by splitting the empire between the two brothers. Anil received the telecom, power generation, financial service, and infrastructure business, making his net worth $4.5 billion. Mukesh got oil and gas, petrochemical, refining, and manufacturing businesses. His net worth was $4.9 billion then. The split also included a non-compete clause between the two brothers to maintain the peace.
The following years saw the rise of Anil Ambani. By 2007, he was worth $45 billion. He launched India’s biggest IPO of Reliance Power in 2008. He forayed into films and invested in Steven Spielbergs DreamWork Pictures.
However, the financial crisis of 2008 caused his downfall. The Rs 11,563 crores Reliance Power had raised in its IPO was supposed to be used for Anil’s ambitious projects of gas, coal, and hydropower. These projects also required the availability of gas at reasonable rates. But, the situation in 2008 was unfavourable for him. This is where Mukesh saw his opportunity. He offered Anil a supply of natural gas in return for annulling the non-compete clause. Anil took the offer. Sadly, this launched the fall of Anil as Mukesh entered the territories of Anil, mainly the communication sector.
Reliance Communication made up 66% of Anil Ambani’s wealth. But, it had a technological limitation as it chose CDMA which was limited to 2G and 3G. That means, he would have to start from scratch for 4G. Meanwhile, Mukesh started investing his money into his upcoming mobile network and gradually launched Jio with 4G. This led to the fall of Anil’s Reliance Communications. To maintain the company, Anil started taking debts. By 2016, his company was debt-ridden. By 2017, his company was out of the market. Besides, his decision to venture into defense also backfired. Along with RCom, his other group companies Reliance Capital, Reliance Infrastructure, Reliance Power, and Reliance Home Finance too suffered.
Since he could not cover the debt, lawsuits followed him from Ericsson, and three Chinese banks – Industrial and Commercial Bank of China Ltd Mumbai Branch, China Development Bank, and Exim Bank of China. He came down to a space where his net worth was zero when took into account of his liabilities. He is still battling courts over the settlement of his dues. Experts believe that besides unfavourable situational factors, his unchecked ambitions too played a role in his downfall.
