4 Ps Business & Marketing_2009 Is This The Do-or-Die Year for Anil D. Ambani

cover feature 2009 Is thIs the Do-or-DIe yeAr for Anil D. Ambani? BIG can mean Bold, Innovative and Grand. BIG can also mean Boastful, Insecure and Grandiose. By the end of 2009, the verdict will probably be out on the BIG ambitions of Anil Dhirubhai Ambani. The crash of the Indian markets and the global meltdown couldn’t have come at a worse time for ADAG. But analysts say that he might stumble, only to soar again... 24 4ps BUSINeSS AND MARKeTING 30 JA NUA RY - 12 feBRUA RY 2009 30 JA NUA RY - 12 feBRUA RY 2009 4ps BUSINeSS AND MARKeTING 25

cover feature “pursue your goals even in the That has an uncomfortable ring of face of difficulties, and convert truth. for instance, there has been an adversities into opportunities.” almost 75% decline in the personal net worth of Anil Ambani to just about $30 Dhirubhai Hirachand Ambani billion (just see the use of words ‘just’ to G describe $30 billion – that’s how one benchmarks the Ambanis!). In early o to the home page of Reli- ance ADAG Group and these 2008, the price of a Reliance Commu- words of wisdom hit you nications share was about Rs.800 while gently. There is little doubt that of rival Bharti was about Rs.1,000. that the younger son of the legendary The gap was a mere Rs.200 a share and Dhirubhai Ambani must be mulling Anil Ambani was closing in. Then the over these words of wisdom. Well and script changes. By December 2008, the truly, after he split with elder brother Reliance scrip has crashed to about Mukesh Ambani in 2005 and launched Rs.200 while that of Bharti has tumbled his own BIG dreams, Anil Ambani is to Rs.600. The gap has now widened to finding the going tough. Almost all his BIG dreams in telecom, energy, enter- tainment, infrastructure and healthcare Year 2008 was need huge investments. And the money is needed at a time when lenders and completely forgetta- investors are holding on to money like Left: The late Dhirubhai Ambani ble for Anil Ambani. a virgin holds on to her chastity. Sure, with sons Mukesh and Anil Ambani; the man and his group will never be in Top: the Mumbai Metro project In 2009, no hopes serious trouble the way many other In- kicks off; Alongside: Sunil Mittal, dian entrepreneurs are. He sure has the CMD, Bharti Group from the economy chutzpah to overcome such hurdles. But there is no doubt that the year 2008 – that started so spectacularly well for him – has wounded him quite deeply. Rs.400; something that must be hurting while Bharti’s numbers had zoomed to Says T. Jagganathan, equity Head at the younger Ambani who is fiercely about 85 million. SMC Capitals, “The year 2008 was competitive and numbers driven. What But it is the Reliance power fiasco a completely forgettable year for Anil must be hurting even more is the yawn- that has caused the maximum damage Ambani. As far as 2009 is concerned, ing gap between the number of sub- to the group. In early 2008, the Rpower there are no hopes whatsoever from the scribers corralled by Reliance and IpO to raise Rs.11,500 odd crores was economy point of view as well as the Bharti (Airtel). In January 2008, RCOM hailed as the most successful IpO in capital markets point of view. The per- had about 37 million mobile subscrib- Indian stock markets. Investors were formance of Reliance group is closely ers while Bharti had about 52 million. delighted at the prospect of such man- benchmarked against their capital mar- By December 2008, the RCOM num- na from heaven. But the euphoria was ket performance.” bers had shot up to about 52 million short lived and the Great expectations ended up in greater disappointment. The scrip listed on the stock exchange RCOM vs. Bharti Airtel Share Price Comparisons (Jan.2008 till date... at Rs.547 in february, 2008. On January 15, 2009, the scrip was available for “Yikes! Why am I falling harder?” Anil Ambani’s Adlabs versus PVR Anil Ambani’s RNRL versus GAIL about Rs.98. Sure, you can say that the markets have tanked and shares of all 1800 600 1200 business houses and entrepreneurs Closing Price (Adlabs) Closing Price (RNRL) Source: NSE 1500 500 1000 have suffered. But the fact of the matter Closing Price (PVR) Closing Price (GAILl) is that Rpower shares crashed by more 1200 400 800 than 74%, while that of rival Tata power 900 300 600 tumbled by a much smaller 54%. This hurts! Says Jagganathan of SMC capital, 600 200 400 “Unfortunately, many people not very Closing Price (RCOM) familiar with the markets still associate 300 100 200 Closing Price (Bharti Airtel) the crash of 2008 to the Reliance power Source: NSE 0

4 Ps Business & Marketing_2009 Is This The Do-or-Die Year for Anil D. Ambani

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