Mukesh Ambani

Forbes Ranking 4

Wealth: $29.0 billion

Citizenship: India

Residence: India

Source of Wealth: Reliance Industries

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Mukesh Ambani

(born on April 19, 1957 in Aden, Yemen)  is an Indian business magnate, philanthropist and the chairman and managing director of Reliance Industries, the largest private sector enterprise in India.

According to Forbes Magazine, as of July 2010 Mukesh Ambani is the wealthiest billionaire in Asia, the fourth richest person in the world, with an estimated fortune of 29 billion U.S. dollars. He is Chairman and Managing Director of Reliance Industries, India’s largest private corporation, owning 48% of its stock.

On October 29, 2007, a surging Indian stock market coupled with appreciation of the Indian rupee against the U.S. dollar made his net worth 63.2 billion dollars. On that day, he was the richest billionaire in the world.

He is married with three children and is moving into a private 27 story building in Mumbai. This 570 foot skyscraper, called Antilla, is the world’s largest private residence with an estimated value of one billion U.S. dollars. It is serviced by a 600 person staff and boasts a dance studio, health club, ballroom, 50-seat screening room, three helipads, and underground parking for 160 vehicles.

In comparison, the most expensive U.S. home is Candy Spelling’s Beverly Hills mansion put on the market at a mere $150 million.

Mukesh Ambani is the oldest child of Dhirubhai Ambani. In a textbook example of rags-to-riches, Dhirubhai began his working career at age 16 as a gas station attendant. In 1958, he started Reliance Commercial Corporation, later renamed Reliance Industries Limited, in partnership with his second cousin Champaklal Damain. The enterprise started with two employees and has grown to over 85,000.

The Reliance Group, India’s largest private sector enterprise, is primarily involved in textiles, petroleum, petrochemicals, power, and telecommunications. Annual revenues are over $44 billion U.S. dollars. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company.

The Reliance Industries petroleum refinery at Jamnagar, Gujarat, India, has a capacity of 660,000 barrels per day, making it one of the largest in the world.

After a heart attack in 1986, Dhirubhai turned control of the business over to his sons Mukesh and Anil, which led to each becoming a billionaire in his own right.

Even in high school, Mukesh Ambani spent long hours in his father’s office on weekends studying Reliance Industries and learning his father’s approach to business.

Dhirubhai began by gathering information about markets, products, governments, competitors, weather — anything which could impact business. He had patience to master the situation he was in before trying to advance. He constantly searched for new opportunities and learned to put himself in the mind of the customer, doing whatever is necessary to complete projects on schedule.

Mukesh Ambani holds a Bachelor of Chemical Engineering degree from the University of Mumbai. He began the MBA program at Stanford Business School, but dropped out after his first year in order to assist his father in building the Patalganga Petrochemical Plant.

After Dhirubhai Ambani’s death in 2002, a feud developed between brothers Anil and Mukesh. Mukesh Ambani is widely seen as following the business philosophy of his father, whereas Anil is more given to new age business principles. Their mother, Kokilaben, was finally able to broker a truce.

Reliance Industries is a major player in plastics, fiber intermediates, polyester, petrochemicals, petroleum refining, and exploration for oil and gas. It is the largest producer of fiber in the world and one of the top ten of petrochemical products

One key is backward vertical integration, the process of taking ownership of supply systems, or at least increasing control of them. If done correctly, it streamlines organizations and eliminates middlemen, lowering production costs and making the firm more competitive. If done incorrectly, increased capital requirements and administrative burdens can be ruinous. Often, power struggles between rival factions working at cross-purposes undermine financial health of the overall organization, particularly if top management is weak. Consistent growth of Reliance Industries under Mukesh Ambani indicates his firm control.

Reliance Industries products are tightly integrated. Raw materials such as PTA, MEG, propylene, and ethylene were previously imported at a higher cost and subject to import duties. Their source is now within the Company, improving operating margins. By reducing exposure to market cycles, raw material prices become more predictable, allowing for more efficient planning and better use of resources. For example, more reliable schedules require less overtime and less inventory. Greater organization means less need to borrow operating capital and more flexibility to seek lower interest rates.

In 2009, Harvard Business Review ranked the Chief Executive Officers of the world’s top fifty publicly traded companies. Mukesh Ambani, billionaire Chairman and Managing Director of Reliance Industries, ranked fifth.

Billionaire brothers, Anil Ambani and Mukesh Ambani have been engaged in a bitter feud since their father Dhirubhai died in 2002. The truce brokered in 2005 by their mother, Kokilaben, seems to have been short-lived. The dispute landed in front of India’s Supreme Court and centers around a private contract between the brothers. The case has been closely followed by international investors who see the Court’s ruling as a barometer of India’s commitment to transparent business dealings.

In July 2008, Mujkesh Ambani moved to block a potential deal that would have allowed his billionaire brother Anil to create one of the world’s largest mobile telephone companies. Anil wanted to merge his company, RCom, with MTN, the largest in Africa. Mukesh went to court to claim right of first refusal over RComs shares, effectively killing the deal.

A bigger issue involves rights to gas deposits acquired in 1999 by then-unified Reliance Industries. Under the terms of the 2005 corporate split, Mukesh agreed to supply gas for seventeen years to Anil’s Reliance Natural Resources for $2.34 per million British thermal units (MBtu). In 2006, Mukesh said the deal needed approval from the Indian Government, which then set a higher price of $4.20 per MBtu. With almost seventeen billion dollars at stake, the Court ruled for Mukesh in May 2010.

In emerging markets, such as India, a few well-connected families often control political power and industry. Power rarely shifts smoothly from one generation to the next. Mukesh Ambani and his brother Anil are extreme examples of both family influence and difficult succession.

Honors and Awards

  • January 2010: School of Engineering and Applied Science of the University of Pennsylvaniaconfers him with the Dean’s medal.
  • Chosen the businessman of the year 2007 by a public poll in India conducted by NDTV
  • Conferred the United States-India Business Council (USIBC) leadership award for “Global Vision” 2007 in Washington.
  • Ranked 42nd among the World’s Most Respected Business Leaders and second among the four Indian CEOs featured in a survey conducted by Pricewaterhouse Coopers and published inFinancial Times, London, November 2004.
  • Conferred the World Communication Award for the Most Influential Person in Telecommunications in 2004 by Total Telecom, October, 2004.
  • Chosen Telecom Man of the Year 2004 by Voice and Data magazine, September 2004.
  • Ranked 13th in Asia’s Power 25 list of The Most Powerful
  • Awarded the “Chitralekha Person of the Year Award — 2007” by Gujarat Chief Minister Narendra Modi.
  • Former Chairman of Indian Institute of Management Bangalore(IIM-B).
  • Fishing Diplomat
  • Honorary Fellow of IChemE (the Institution of Chemical Engineers)

He is also a member of International Advisory Board a neo conservative globalist think tank council on foreign relations.

Antilia aka Antilla, Mukesh Ambani Mumbai House
Antilla aka Antilia: Mukesh Ambani House

Antilia (Mukesh Ambani’s home) as seen from Altamount Road, Mumbai