Flamboyant billionaire Anil Ambani was seen as the crown jewel of India Inc. after the public split of father Dhirubhai’s massive Reliance business empire. Anil, the younger son, got the new age businesses which held promise for the future while his older brother Mukesh was to make do with legacy Reliance companies. Anil surpassed his brother to command a net worth of $42 billion by 2008, becoming the sixth richest man in the world.
While everyone saw Anil Ambani as the successor to carry forward Dhirubhai Ambani’s legacy, the situation is completely reversed over a decade-and-half from Anil’s peak. Mukesh Ambani is today Asia’s richest man with an unimaginable net worth of Rs 7,99,893 crore ($96.9 billion). On the other hand, Anil famously stated some three years ago that his net worth was now zero.
Here’s what went wrong for Anil Ambani, from adding $30 billion to his net worth in a year, to filing for bankruptcy:
Poised for greater wealth and expansion, a series of moves by Anil Ambani fell short of what he expected from them.
The first was the proposed deal with South African telecom giant MTN that resulted in failure. Anil Ambani’s Reliance Communications was once India’s top mobile service provider. However, soaring debts led him to look for a merger with MTN to build one big telecom entity. But the deal collapsed due to legal issues.
The next big setback came in 2011 from the 2G scandal where top executives of his firm were arrested on suspicion of conspiracy. Anil Ambani was also questioned by the CBI. The stocks of Anil Ambani’s companies fell severely hurting his net worth.
With existing debts strangling the business and scandals hurting market perception, Anil Ambani took on more than $1.2 billion fresh fund from Chinese banks on a personal guarantee. Inability to pay off debts meant Anil had Chinese lenders on his back to recover millions of dollars.
Perhaps the biggest blow came from the competitive point of view when his older brother Mukesh Ambani entered the telecom business with Jio in 2016. Anil Ambani was struggling with crisis at multiple fronts by then, with Reliance Communications’ valuation spiralling down to just 2 percent of what it was just 3 years ago. Another major business of Anil, Reliance Power was forced to sell its assets.
This meant he had no firepower left to compete as Mukesh advances his hold in the telecom and digital sectors. The lawsuit by Swedish firm Ericsson demanding $80 million payment turned into an embarrassment when Anil was unable to pay.
As investments failed and debt piled, it became clear that the strategies and planning behind them lacked essential ingredients for success. Divided focus on multiple fronts left Anil with no anchor business to stave off crises at other ventures.
