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The Economic Times

The billionaire raj of Mukesh Ambani and his journey through India's new gilded age

The billionaire raj
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The billionaire raj

Reliance Industries (RIL) chairman Mukesh Ambani turned 62 today i.e. on 19th April 2019. The journey of India’s richest man is always the inspiration for everyone. Earlier in April this year, Ambani was featured in the TIME magazine's list of 100 most influential people.

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The simpler days
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The simpler days

Born in Aden, Yemen to Dhirubhai Ambani, who at the time worked as a gas-station attendant, he was the eldest of four children.

The family moved to Mumbai when Ambani was 7-years-old, living at the Bhuleshwar neighbourhood in Bombay – those were the simpler days. In the time to come, as Dhirubhai Ambani would go on to form Reliance, a lot would change.

In pic: Kokilaben Ambani celebrated her birthday with sons Mukesh and Anil at the Nathdwara Temple in Rajsamand district.

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Looking for new partners
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Looking for new partners

India's richest company (with a market capitalisation of Rs 8.5 trillion) is in talks with the world's most profitable company in history to sell a part of its (and India’s) most profitable business (it reported a record net profit of Rs 10,362 crore in the March quarter on Thursday).

Reports say Reliance Industries is in talks with Saudi Aramco to sell up to 25% stake in its refining and petrochemicals business. That’s not all, the company reported on Wednesday that it is selling a stake in a unit that owns a fleet of six very large ethane carriers to Japanese shipping group Mitsui OSK Lines. Last year, it sold its US shale units.

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One of the most indebted
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One of the most indebted

There is also talk of Reliance tapping the stock markets with an initial public offering (IPO) of Reliance Retail. So why does Reliance need all that money?

One of the reasons is that one of India’s richest companies is also the most indebted – Reliance is sitting on a debt of a whopping $45 billion. The debt burden has gone up considerably in the last few years after its foray into telecom. If the company is able to raise $15 billion from Aramco (25% of an estimated $60 billion valuation) as reports say, that would take care of a third of its current liabilities.
Big company's big burden

In pic: Anil Ambani with Narendra Modi

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Looking at new avenues
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Looking at new avenues

While RIL’s oil business generates enough cash to take care of its debt, it’s not as profitable as it once was (the refining margins haven’t grown fast enough).

On the other hand, its consumer businesses — Reliance Jio and Reliance Retail —are growing at a brisk pace and now account for about a fifth of the total profits (profit from the retail business jumped 77% in the March quarter).

However, these new businesses also need a lot of cash to expand, which can come from the stake sales in RIL’s core business, oil.

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A fixed salary
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A fixed salary

All along the way, Ambani – who draws a fixed salary Rs 15 crore since 2009 - has kept his friends close. In a 2007 interview to MoneyLIFE, Ambani had said that while from an external perspective his life had changed – but personally he saw consistency.

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Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service