When it comes to India's largest private company, many people's minds are still stuck on the century-old Tata Group. Indeed, this enterprise is huge, and its business covers dozens of fields such as steel, automobiles, aviation, consumer goods, chemicals, etc. With annual revenues of more than $100 billion, the Tata Group ranks first in the list of Indian companies in terms of revenue.
But the commercial market is changing, and there are only temporary victors and no eternal hegemons. In recent years, Tata Group's revenue has been surpassed by Mukesh Ambani's Reliance Industries Group, the richest man in India and the richest man in Asia. The operating income of the two companies alternately leads, and the strength scale is between the two.
Reliance Industries Group Origins
Compared to the Tata Group's nearly 160-year history, Reliance Industries Group was founded less than 70 years ago. In 1958, Drubhai Ambani, the first head of the Reliance Group, returned to India from Yemen to dig for gold. With $500 from scratch, he founded Reliance Daily Commodities ** Export Company, which mainly exports nylon yarn, rayon, cashew nuts and other goods.
Born in a low-caste caste, Drubhai Ambani had only a primary school education, but with a strong business talent, he roamed the shopping malls, and by 1979, the company's annual sales reached 1$900 million. 1900 million US dollars, in terms of purchasing power, is still in the billions of dollars.
The ever-growing Reliance began to expand wildly, successively entering the chemical fiber industry, petrochemical, electric power, communications, infrastructure and other industries, like the tentacles of an octopus, reaching out to all areas of the Indian economy. In particular, the petrochemical industry has truly laid the foundation for the rise of Reliance Group.
At the end of the 80s of the last century, after monopolizing the production of chemical fiber in India, Reliance Group began to invest in the field of petrochemical raw materials, investing 50 billion rupees to establish a large-scale petrochemical complex, which refines 6 million tons per year after completion, accounting for a quarter of India's refining capacity, thus ranking among the world's largest petrochemical companies.
In 1992, Reliance was listed on the New York Stock Exchange, becoming the first Indian company to enter the international capital market. At the end of the 90s, Reliance Group's ** surpassed India's Tata Steel, but at that time there was still a big gap from the scale of Tata Group's revenue. But the era of industrial giants belonging to the Reliance Group began.
In 2002, Reliance acquired a controlling stake in all petrochemical companies in India. The company has a decisive influence in the textile, petroleum, chemical, electric power, telecommunications and other industries that are the lifeblood of the national economy. All this is naturally inseparable from the old Ambani's planning. It took him more than 40 years to build Fidelity, a first-class company that started with $500, into a giant group with annual revenues of more than $10 billion, and became one of the world's top 500 companies.
Brothers split up and develop their own families
Also in July of that year, the elder Ambani died suddenly due to a stroke, and he did not have time to leave any will. His estate fell to his eldest son, Mukesh Ambani, and his second son, Anil Ambani. However, the two brothers disagreed on the business philosophy of the company and broke out the division of the family property. In June 2005, at the ruling of the old mother, the brothers held a separation ceremony at the family temple. The eldest brother, Mukesh, took over the family's petrochemical and energy businesses, using the name Reliance Industries, while the younger brother Anil took charge of the family's telecommunications and power divisions, continuing to bear the name of Reliance.
Since the brothers' separation, the development has been very different, with two companies under the Reliance Group, led by his brother Anil, Reliance Tong and Reliance Navy and Engineering, both filing for bankruptcy, and four other companies, Reliance Capital, Reliance Communications, Reliance Infrastructure, and Reliance Power, all signing huge debts, including $700 million in loans from three Chinese banks, which have not yet been repaid. It can be said that the Reliance Group is actually bankrupt.
It is the Reliance Industries Group run by the boss Mukesh that is more representative of the Reliance Group before the two brothers separated. In 2016, Mukesh's Reliance Industries entered the Indian 4G market, and its Jio won 100 million users in six months after its launch by providing users with short-term free ** and ultra-low prices**, and became the largest operator in India in only 4 years. And in October this year, JIO announced that it had 70 million 5G subscribers. The younger brother Anil was also squeezed out of the game, and he collapsed.
In September 2017, with the success of the Jio mobile phone, the 60-year-old Mukesh became the richest man in Asia with a net worth of $37.8 billion. Mukesh, who has amassed a huge fortune, has begun to enter the retail sector, building a large supermarket like the Western society across the country, and recently spent $1 billion to buy the opening of the World Plaza, a commercial and cultural complex in Mumbai's financial and business district, which has attracted many international first-line luxury brands.
In the newly released Fortune Global 500 list, in 2022, Reliance Industrial Group will continue to rise in revenue and ranking, ranking 88th with a turnover of US$109.5 billion and a net profit of US$8.3 billion. Reliance Industries Group also has a market capitalization of $200 billion, making it the largest company in India by market capitalization.
How strong is Reliance Industries today?It accounts for 3% of India's GDP, contributes one-fifteenth of India's tax revenue, and accounts for more than one-fifth of the total profits of all private companies. One out of every four Indian shareholders has bought the group's **, making it a veritable Indian business empire. Just last year, Mukesh was worth more than $90 billion, ranking ninth on the list of the world's richest people and the only entrepreneur in Asia to make it into the top 10.
Reliance Industrial Group is so strong that only China's China Merchants Group and China Resources Group, two major central enterprise consortiums, can stabilize it. Although CITIC and Poly Group have huge assets, they are inferior to Reliance Industries in terms of turnover and net profit. The ranking of the world's top 500 companies is also behind Reliance Industrial Group.
India, a country with countless problems in the eyes of outsiders, has given birth to this private enterprise giant, which is worth recalling and pondering!