Should Mukesh Ambani be unloved?

Ambani is under attack by the government of India, media, regulators such as Sebi & political parties such as Aam Aadmi party

In a recent article "Unloved Billionaire", The Economist wrote about the paradox of why Mukesh Ambani, Chairman of India's most valuable company Reliance Industries, is so unloved in India. 

 

Ambani is under attack by the government of India, regulators such as the Sebi, media, political parties such as the Aam Aadmi party. And now, even the small shareholders are unhappy because they lost their wealth by 4% in the company's shares in the past five years. 

 

On Friday, market regulator Sebi fined Reliance of Rs 13 crore for violating disclosure norms.

 

As a keen observer of Ambani's progress in the past two decades, it's obvious to me why Ambani has lost the goodwill. The company is secretive, does not believe in transparency, and a bitter sibling war has destroyed the halo around the group. The fights with the oil ministry and the negative remarks by government auditor the Comptroller & Auditor General on its broadband licence are not helping the matters either. Many a time, journalists’ queries are either ignored or, when required, information is supplied in “off-record” briefings. 

 

Reliance has become an India-centric success story while its peers like Tata and Birla are now earning more than 50% of their revenues from overseas operations. Ambani’s plans to set up Special Economic Zones outside Mumbai never took off following agitation by locals over brazen land acquisition. Ambani had to beat a hasty retreat from a similar SEZ in Haryana, which the critics alleged, had become a real estate play.

 

But as far as business is concerned, no one can take the credit away from Ambani for thinking big. Ambani was instrumental in setting up not one but two world-class large oil refineries in Jamnagar, Gujarat. Ambani had the vision to set up retail chain across India and is now making money of it.

 

The 57-year-old billionaire is also investing a massive Rs 70,000 crore in the Indian wireless telephony where the Tata group has failed miserably. The telecom business, according to Ambani himself, will create 10,000 new  jobs. This is the second time Ambani is building a telecom empire after giving his earlier venture to his younger brother, Anil, as part of the family succession settlement. His ongoing $10 billion (Rs 60,000 crore) expansion in petrochemical business in Gujarat will add substantially to the economic growth.

 

India needs more entrepreneurs like Ambani who can take risk to set up new projects and create employment. Ambani may be unloved by many but as far as job creation and new projects are concerned, there is no doubt that he is number one. Reliance is loved, at least by new gen, young employees. If Ambani succeeds in creating new jobs, then no one who can stop him from earning goodwill from young India.