Anil Ambani birthday: A tale of Riches to Rags of an Ambani Scion
Anil Ambani birthday: Dhirubhai Ambani, one of the richest people of his time in India, is one of the best examples of rags to riches story that India has ever seen.
Anil Ambani birthday: Dhirubhai Ambani, one of the richest people of his time in India, is one of the best examples of rags to riches story that India has ever seen. He was someone who started with almost nothing and ended up becoming the richest man in India. During his meteoric rise, Dhirubhai Ambani was the owner of the Reliance Group of companies. In fact, it was a time, when the brand Reliance turned to be synonymous with success in India.
After his death, Dhirubhai Ambani left behind two sons, Mukesh Ambani and Anil Ambani, without signing his will. The two brothers parted their ways, leading to the partition of the Reliance Empire in 2006. After the partition, the elder son Mukesh Ambani walked away with a net worth of around $4.9 billion, while Anil Ambani inherited a net worth of $4.5 billion.
Interestingly, Anil walked ahead with the new-age telecom business along with the energy and financial services business. Mukesh walked ahead with the petrochemicals operations, which formed the core of the group. Anil had an opportunity to tap into the potential of the Indian mobile telecom operations, which was quite young at that juncture.
However, Anil Ambani, once the sixth richest person in the world, faced the heat of few wrong decisions or you can say lack of farsightedness similar to his elder brother Mukesh Ambani, has crashed his empire and is surrounded by billions of debt today. He in February 2020 declared before a UK Court that his net worth is zero and he is bankrupt.
Earlier in 2019, a Mumbai Court held him in criminal contempt for non-payment of personally guaranteed debt Reliance Communications owed to Swedish gear maker Ericsson.
Here onwards, the article will look into few factors that led to the downfall of Anil Ambani.
Reliance Communications: Reliance Communications, which acted as a crown jewel in Anil Ambani's Reliance empire, played a significant role in his success in financial terms. It once had held around 17% market share being the second largest telecom company in India felt it hard to compete with the competitors and eventually shut down its operations in 2017. The main reason for the failure was its inability to upgrade itself to the 4G (fourth generation) and the debt. The main threat in the era was Jio, the 4G network which was started by his elder brother Mukesh Ambani.
Pipavav Defense: Anil Ambani's one among few other disastrous decisions was the idea of buying the Pipavava Defence, which was reeling under a debt of around Rs 7,000 crore, and was dragged to NCLT for insolvency proceedings by IDBI Bank and IFCI. The reason was its inability to pay off the debts that it had.
Besides, his other companies like Reliance Capital, Reliance Infrastructure, Reliance Home Finance, and Reliance Power were also incurring huge losses.
Defaults on bond repayments as well as loans to the banks and other lenders also had a wrong impact and affected Anil Ambani's relation with several banks and lenders and he was dragged to courts, where he appealed saying that he does not have any more assets to be liquidated, although, he still owned many properties, luxurious cars and yachts.
To sum it up, Anil Ambani's story from being one of the most powerful men in India to be bankrupt can be treated as an example of riches to rags, which is just opposite to his father Dhirubhai Ambani's story of rags to riches story.