Dhirubhai Ambani

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Lore & Background

Dhirubhai Ambani was born on 28 December 1932 in Chorwad, Malia Taluka, Junagadh district, Gujarat, one of the sons of Hirachand Gordhanbhai Ambani, a village school teacher, and Jamnaben Ambani. He studied at Bahadur Khanji school. He returned from Aden in 1958 to try his hand at his own business in India in the textile market. It is also said that he worked at a gas station as a petrol vendor. Back in India, he started 'Majin' in partnership with his second cousin Champaklal Damani, who lived with him in Yemen, to import polyester yarn and export spices to Yemen. The first office of Reliance Commercial Corporation was set up at Narsinatha Street in Masjid Bunder — a 350 sq ft room with a telephone, one table, and three chairs. In 1965, Ambani and Damani ended their partnership due to different temperaments and takes on business, and Ambani started on his own. Ambani faced numerous accusations of market manipulation, tax evasion, and cronyism. In 1988, during a rights issue regarding partly convertible debentures, the Bear Cartel, a group of stock brokers from Calcutta, short-sold shares of Reliance. To counter this, 'Friends of Reliance' bought the short-sold shares. The Bombay Stock Exchange closed for three business days. Authorities brought down the 'Unbadla' rate to ₹2, and the Bear Cartel bought shares at higher prices; it was learnt that Dhirubhai Ambani himself supplied those shares and earned a healthy profit. An investigation by the Reserve Bank of India found no unethical or illegal acts by Reliance or its promoters. Ambani suffered his first stroke in February 1986, which paralyzed his right hand. He was admitted to Breach Candy Hospital in Mumbai on 24 June 2002 after a second major stroke, remained in a coma for more than a week, and died on 6 July 2002 at age 69.

Reader's Guide

Dhirubhai Ambani's significance comes from founding Reliance Industries in 1958 and taking it public in 1977. After his first stroke in 1986, he handed control of Reliance to his sons, Mukesh and Anil. Following his death, the group split into Reliance Industries Limited headed by Mukesh and Reliance Anil Dhirubhai Ambani Group headed by Anil. As of 2017, the company had more than 250,000 employees. In 2012, Reliance Industries was one of two Indian companies in the Fortune 500 top 100. In 1988, an unauthorized biography by Hamish McDonald, 'The Polyester Prince', outlined his political and business conquests; it was not published in India due to threatened legal action, but an updated version, 'Ambani and Sons', went on sale in 2010. A Bollywood movie 'Guru', directed by Mani Ratnam, is said to be set on his life due to plot similarities, though Ratnam denied it is a biography, saying it draws the 'essence of the character' from real life. Ambani received the Dean's Medal from The Wharton School on 15 June 1998, the first Indian to do so, and was posthumously awarded the Padma Vibhushan in January 2016.

Did You Know?

• Dhirubhai Ambani was one of the sons of Hirachand Gordhanbhai Ambani, a village school teacher belonging to the Modh Bania community.
• He returned from Aden in 1958 and it is said he worked at a gas station as a petrol vendor before starting his own business.
• The first office of Reliance Commercial Corporation was a 350 sq ft room in Masjid Bunder with a telephone, one table, and three chairs.
• In 1988, the Bombay Stock Exchange was closed for three business days due to a conflict between the Bear Cartel and 'Friends of Reliance' over Reliance shares.
• An unauthorized biography, 'The Polyester Prince', was not published in India because the Ambanis threatened legal action.

From a Village Classroom to a 350-Square-Foot Office

Dhirubhai Ambani was born on 28 December 1932 in Chorwad, a small town in Junagadh district, Gujarat. His father, Hirachand Gordhanbhai, was a village school teacher from the Modh Bania community, and his mother was Jamnaben. Dhirubhai attended Bahadur Khanji school before eventually leaving for Aden, where he reportedly worked as a petrol vendor at a gas station. In 1958, he returned to India with a single ambition: to build his own business in the textile market. Together with his second cousin Champaklal Damani, who had shared his life in Yemen, he launched Majin, a venture importing polyester yarn and exporting spices back to Aden. Their first Reliance Commercial Corporation office was a cramped 350-square-foot room on Narsinatha Street in Masjid Bunder, Mumbai, containing little more than a telephone, a single table, and three chairs. Two assistants handled daily operations while the Ambani family lived in a modest two-bedroom apartment at Jai Hind Estate in Bhuleshwar. By 1965, the partnership dissolved—reportedly over clashing temperaments and divergent business philosophies—and Dhirubhai set out entirely on his own.

The Bear Cartel and the Storm of Controversy

Throughout his career, Ambani faced persistent accusations of market manipulation, tax evasion, and cronyism. The most dramatic episode unfolded in 1988 during a rights issue involving partly convertible debentures. Rumors swirled that Reliance was aggressively defending its share price, and a group of Calcutta-based brokers known as the Bear Cartel seized the opportunity to short-sell Reliance stock. In response, a circle of brokers later dubbed Friends of Reliance moved to buy up those short-sold shares on the Bombay Stock Exchange. The confrontation was so severe that the BSE shut down for three business days. BSE authorities ultimately intervened, cutting the Unbadla rate to two rupees and demanding the Bear Cartel deliver shares within days. The Cartel ended up purchasing Reliance shares at higher market prices, and reports emerged that Ambani himself supplied those shares, pocketing a substantial profit. Detractors and the press questioned how a former yarn trader could command such enormous cash flows. Finance Minister Pranab Mukherjee later revealed in Parliament that a Non-Resident Indian had invested up to 220 million rupees in Reliance between 1982 and 83, routed through Isle of Man-registered entities whose promoters all shared the surname Shah. An RBI investigation found no unethical or illegal transactions.

A Second Stroke, a Final Chapter, and an Empire Divided

Dhirubhai Ambani's life had already been marked by health crises. His first stroke struck in February 1986, paralyzing his right hand, and in its aftermath he transferred operational control of Reliance to his two sons, Mukesh and Anil. His final stroke came on 24 June 2002, and he was rushed to Breach Candy Hospital in Mumbai. He lapsed into a coma lasting more than a week, with numerous doctors consulted in an effort to save him. On 6 July 2002, at the age of 69, Dhirubhai Ambani died. In the years that followed, the empire he had built was formally split: Reliance Industries Limited came under Mukesh, who was elected CEO, while the Reliance Anil Dhirubhai Ambani Group fell to Anil as chairperson. Mukesh acknowledged in a November 2004 interview that ownership differences existed between the brothers, though he stressed they remained in the private domain. By 2012, Reliance Industries had become one of only two Indian companies ranked in the Fortune 500, and by 2017 the group employed more than 250,000 people—a testament to the scale Dhirubhai had envisioned from that tiny Masjid Bunder room.

Honors, Unauthorized Biographies, and a Cultural Footprint

Dhirubhai Ambani's achievements earned him recognition both in India and abroad. In June 1998, he became the first Indian to receive the Dean's Medal from The Wharton School at the University of Pennsylvania, awarded for setting an outstanding example of leadership. In January 2016, the Indian government posthumously conferred the Padma Vibhushan, the nation's second-highest civilian honor, in acknowledgment of his contributions to trade and industry. His life also captured the imagination of writers and filmmakers. In 1988, Hamish McDonald published an unauthorized biography titled The Polyester Prince, chronicling Ambani's political and business conquests; the book was blocked in India after the Ambanis threatened legal action, though an updated edition appeared in 2010 under the title Ambani and Sons without further legal challenge. Bollywood director Mani Ratnam's film Guru is widely believed to draw on Ambani's story, though Ratnam maintained it was not a biography but rather captured the essence of the character from real life.