The instance depicts how the Reliance Group was founded by Dhirubhai Ambani with only Rs. 50,000 in late 1950 and grew it into an US$17 billion conglomerate in a span of fifty years. Known for 'Betting on Hopeless' and 'Contagious Restiveness', the creator ventured into new businesses to create the Reliance Group, obtained connected companies and finished growth projects in record time.
In 2005, it constituted of telecom, petrochemicals, textiles, power, and financial services businesses. He delegated local investors to fund expansion and growth, created an equity cult among Gujarati and other Indian investors, and established a tradition of rewarding loyal shareholders. The creator was awarded the Wharton Business School Dean's Medal in 1998, for creating wealth of Reliance shareholders during a regulated Indian economical regime.
With his two sons, Mukesh and Anil, the founder co-managed the Reliance Group since the early 1990s, for a decade. Following the creator's demise in 2002, differences between the brothers eventually led to a need for division of corporate assets.
In November 2005, the share price of Reliance Industries Limited (RIL), the Group's flagship company, tumbled following the break up statement. The Board of RIL expected to unlock the value of acquired companies and new enterprises by rewarding faithful investors with positions in new businesses. Nonetheless, analysts were unsure to estimate the size of yields to investors due to uncertainty of the drop in valuation and RIL's value of RIC, which is an unlisted telecom firm in the Group.
Publication Date: 10/14/2010
This is just an excerpt. This case is about Finance
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