Mukesh Ambani's journey to become one of the two wealthiest men in India was one of humble beginnings. He was actually born in in Aden, Yemen, in 1957 as his father moved the family there from India for work. Not long after Mukesh was born, his father, Dhirubhai Ambani, moved the family back to India and started a textile trading business with a cousin. That business partnership was eventually dissolved as Dhirubhai wanted to venture out on his own, and in 1966 he founded what would eventually become Reliance Industries.
Reliance got its first big break in 1980 when it was awarded a license to open a polyester filament yarn manufacturing plant in India. At the time Mukesh was in the U.S. studying for his MBA at Stanford. However, a year later his father called him back to India to initiate Reliance's backward integration from textiles sales into manufacturing polyester fibers. The process of going backwards to move forward has ever since been a hallmark of Mukesh and Reliance Industries.
Turning oil into riches
While textiles are what drove much of Reliance Industries' early growth, oil is what now drives most of its profits. Under Mukesh, in 2000, the company began to build the world's largest oil refinery and petrochemical complex. The Jamnagar refinery complex now has the capacity to process 1.24 million barrels of crude per day at what is the world's largest refining hub. The entire complex was built in record time and at very competitive costs and its scale, design, flexibility, level of automation, and level of integration is a trend setter for the way future refineries around the world will likely be built.
It's also a huge profit center for Reliance. During the fourth quarter of 2014 the company's refining division produced a record-high operating profit and the segment now contributes half of the company's nearly $1 billion in quarter profits.
However, as important as refining is to Reliance, Mukesh sees oil and gas production as being a big source of future profit growth, which is why he has backward integrated the company to produce now oil. In 2009 the company commenced production of hydrocarbons from the KGD6 block, just two years after making the discovery, as it became the world's fastest green-field deepwater oil development project. Since then the company has expanded its exploration and production business throughout the world, seeking to be a funding partner for new sources of oil and gas resources. Through this process the company has become an early leader in U.S. shale as it has partnered with notable names like Chevron (NYSE:CVX) and Pioneer Natural Resources (NYSE:PXD). In addition to that it signed a groundbreaking partnership with BP (NYSE:BP) on a major deepwater development offshore India.
A gusher of wealth
Today, Reliance is a global conglomerate that while heavily weighted toward energy also has retail and telecommunication businesses. It's a multibillion enterprise that is India's second-largest publicly traded company, of which Mukesh owns a 48% stake in that was inherited after his father died. This stake fuels the bulk of his net worth, which is at an estimated $20 billion, and depending on the day makes him one of the two wealthiest men in India.
With that wealth he has built one of the most expensive homes in the world. The 27-story, 400,000 square foot "Antilia" is estimated to have cost over a billion dollars to build. He lives in the home with his wife and their three children as well as a 600-person staff, which are needed to take care of the health club, gym, dance studio, ballroom, 50-seat movie theater, elevated garden, and the underground parking facility for his 168 vehicles.
However, that extravagant home and his luxury car collection aside, Mukesh and his wife Nita have a well-known philanthropic side. While he has built Reliance, she has helped build an elite international preparatory school, the nation's first Braille newspaper in Hindi, a Premier League cricket team, and a 400-acre model township that houses 12,000 people and was built next to Reliance's massive refining complex. The family is also overseeing the construction of a 400-bed hospital wing and have plans to build a world-class university on 1,000 acres of property. Meanwhile, Mukesh is moving forward with ambitious plans through Reliance to launch Jio, which would make broadband and digital services in India no longer a luxury, but much more easily accessible to all Indians.
While Mukesh Ambani's fortune was largely built by oil refining, his calling card has been to go backward in order to move forward. There's a great lesson to be learned here, which is that in certain circumstances moving backward, whether it's down the value chain, or returning home, isn't so much a step backward, but really is a giant leap forward. It's a formula he used to become one of the richest men in India.