Mukesh Ambani – Profile

October 25th, 2010 - by admin
Mukesh Ambani - CMD, Reliance Industries Ltd.

Mukesh Ambani - CMD, Reliance Industries Ltd.

Mukesh Dhirubhai Ambani – business tycoon, industry icon, respected leader… Many are the adjectives that can be associated with the Chairman and Managing Director of Reliance Industries Limited, India’s largest private sector company.

FAMILY
Born on April 19, 1957 in Yemen, Mukesh Ambani is the elder son of the legendary Dhirubhai Ambani. He grew up with 3 siblings, Anil, Dipti and Nina. The passion of their father was balanced by the softness and love of their mother, Kokilaben and the prudence and practicality of Mukesh Ambani’s wife, Nita. In subsequent years, daughter, Isha, and sons, Anant and Akash, were beloved additions to their home.

EDUCATION
Mukesh Ambani did his schooling from Abaay Morischa School, Mumbai and went on to earn a Bachelor of Chemical Engineering degree from UDCT, Mumbai. His choice of education reflected his father’s philosophy of investing in businesses of the future.

To prove to the world that Mukesh Ambani could do whatever he put his mind to, he applied and got accepted by some of the top universities when he applied for their Master of Business Administration course. Eventually, he chose Stanford University as his alma mater, but his growing entrepreneurial instinct urged him to drop out and help his father with his polyester plant.

Even while pursuing the challenging chemical engineering course, Mukesh Ambani was actively involved in his father’s company. As soon as he joined the company formally in 1981, he became one of the main impetuses for the company’s gargantuan progress.

EMERGENCE OF THE ENTREPRENEUR
Reliance’s backward integration from textiles into polyester fibers and further into petrochemicals was Mukesh Ambani’s brainchild. Reliance’s Jamnagar Refinery in Gujarat, which is now the world’s largest grassroots petroleum refinery, was directed under his watchful gaze. He was the force behind the creation of 51 new, world-class manufacturing facilities encompassing diverse technologies that increased its annual manufacturing capacity from less than a mission tons to over thirteen million tons. Currently, the refinery has a manufacturing capacity of 60,000 barrels per day.

Dhirubhai’s dream project, Reliance Infocomm, which is looked after by brother, Anil Ambani, after the company split in 2005, was also entrusted to Mukesh Ambani in its earlier stages.

Mukesh Ambani’s next strategy is to take a giant leap into the retail with stores across the country.

ACHIEVEMENTS AND ACCOLADES
Mukesh Ambani’s popularity clearly shone forth in 2007, when he was selected as Businessman of the Year by a public poll conducted by NDTC. In the same year, he was presented the United States-India Business Council (USIBC) Leadership Award for Global Vision in Washington D.C., USA as well as the Chitralekha Person of the Year Award by the Chief Minister of Gujarat, Shri Narendra Modi. The same year also saw him recorded as India’s first trillionaire.

Rewinding his life, Mukesh Ambani was chosen as Economic Times Business Leader of the Year in 2006 and ranked 42nd among the World’s Most Respected Business Leaders and 2nd among the four Indian CEOs featured in a survey conducted by Pricewaterhouse Coopers and published in the Financial Times, London in 2004.

He was also conferred with the World Communication Award for the Most Influential Person in Telecommunications by Total Telecom and chosen Telecom Man of the Year by Voice and Data magazine in 2004. He ranked 13 in Fortune Magazine’s Asia’s Power 25 list of the Most Powerful People in Business and topped the Power List published by India Today for the second consecutive year.

LOCAL KING
In spite of managing the country’s biggest private sector company, Reliance Industries Ltd., Mukesh Ambani’s sight is currently on the Indian market alone. His vision is clear – he wants to expand rapidly within the country and change the lives of its people for the better. However, his focus extends beyond merely size increase to value generation and upscaling.

The MODERN INDIAN PHILANTHROPIST
Mukesh Ambani is regarded as the ‘modern day philanthropist’, whose paragon actions have inspired and cultured a socially sound community today. As the saying goes, ‘A man’s true wealth here-after is derived by the good he does in this world’; Mukesh Ambani has persistently held social welfare through corporate social responsibility (CSR) and charitable deeds in high esteem. He believes in industrious innovations that transform society; and that unless a business has a larger purpose that serves the millions readily, sustainable growth is impracticable.
The Reliance Foundation, spearheaded by Mukesh Ambani and his wife Nita Ambani, is one of India’s largest corporate run social organization that addresses social development imperatives of India; namely quality, formal and vocational education, affordable high-quality health care, meaningful rural development and urban renewal, and protection and promotion of India’s priceless heritage of arts and culture.

The VALUE CREATOR

Mukesh Ambani run Reliance Industries Limited has been accorded with the second position in the list of world’s 10 biggest ’sustainable value creators’. By generating the largest shareholder value in terms of market capitalization, Mukesh Ambani and Reliance Industries Limited, both, are held as the finest corporate entities of the world today.

Mukesh Ambani has for long regarded ‘value-addition’ process as primal to any business establishment. He affirms that unless a business admits value; in regards to its products, services, work force, shareholders and end users, a business’s worth is futile. With the influx of this belief into tangible action at RIL, Mukesh Ambani’s conviction has been proven true as Reliance climbs high on prosperity charts, becoming India’s most trusted and value-rich brands today.

THE STORY WITH NO END
Mukesh Ambani dons a cap with many feathers, but he carries them with grace and panache. At 53 years, his sheer energy is enough to take one’s breath away. Having achieved so much, Mukesh Ambani remains hungry for more. So, he continues to create, continues to build and continues to shine brightly on India’s business horizon.

The Reliance Digital store at Moments Mall Kirti Nagar, in the city of Delhi is all set to welcome actor Imraan Khan, Katrina Kaif and Ali Abbas Zafar today(5th September 5, 2011) at 5:00 PM. The actors and their team will visit the store for the promotion of their latest flick Mere Brother ki Dulhan. The cast is expected to interact with the crowd and media at the promotion event.

This Reliance Digital Store is the latest addition to the electronics chain. The store was launched on 3rd September. As a part of special launch festivities, Reliance Digital has put in place exclusive launch offers which range from price-offs and discounts to exchange offers. As a part of the ‘Mismatch Exchange’ scheme, customers can bring in their old refrigerators, washing machines and television sets in exchange for any of the latest electronic product from the store. Reliance Digital is also offering a special purchase scheme where customers can take home any product of their choice at an easy EMI of just Rs. 51. And every purchase will be backed by Reliance Digital’s customer support team at ‘Reliance resQ’, available 365 days a year.

About Reliance Digital:
Reliance Digital is a one stop shop with cutting edge technology for the entire range of household electronics, appliances, computers, gaming and telecom products. Reliance Digital Stores house over 150 international and national brands and over 4000 products. The range at Reliance Digital spans, Audio and Video products (TV’s, DVD players, Car Audio players), Electronic Musical Instruments and Digital Cameras, Gaming Consoles, Computers and Peripherals, Mobile and Fixed line instruments, Durables like, Air Conditioners, Refrigerators, Water Purifiers, Kitchen and Home Appliances.

After the successful start of the Hero Indian Super League (ISL), the joint venture between the International Management Group (IMG) and Reliance Industries Limited (RIL) has started exploring another sport. The promoters of ISL have started promoting grassroots level basketball by launching two leagues along with the Basketball Federation of India (BFI).

By launching two properties, namely the Indian School Basketball League (ISBL) and the Indian College Basketball League (ICBL), IMG-Reliance along with BFI intend to instill basic knowledge of the sport at the grassroots level. The long term goal of this initiative is to cultivate talent that adheres to national standards.

Chief Executive Officer of BFO, Mr. Roopam Harish Sharma said, “We need to catch the players young and train them. The idea to start this league is to identify the best players and train them for international level.”

The partnership between these two organizations includes a 30 year commitment where IMG-Reliance will help develop this sport all over the country. In addition to this, BGI has granted IMG-Reliance commercial rights for sponsorship, advertising, merchandising, broadcasting, film, intellectual property franchising and new league rights as a part of this partnership.

Off to a Favorable Start

These two leagues were conceived in Delhi and Indore after which a series of matches were played in cities such as Hyderabad, Raipur and Dehradun. The league matches started in Mumbai on October 17th and are currently being played at the Khalsa College. Divided into sub leagues, namely Premier and Challenger, the ICBL will be played in 9 tier 1 and 9 tier 2 cities. The ISBL too, has been divided into two sub leagues.

Referring to the progress of the league, Mr. Roopam Harish Sharma said, “Mumbai is a very active city, full of life and energy. We are looking forward to an exciting display of matches as ICBL and ISBL. The response received so far has been positive from the end of all teachers, students and parents. I am very confident that a revolution will soon be created in the history of basketball in India.”

According to the Chief Operating Officer of IMG-Reliance, Mr. Ashu Jindal, India is currently witnessing a revolution with regards to sports. Considering that basketball is the second most popular sport in the world, he believes that it deserves a fair share of support and push. He added, “These two leagues are being played across 22 cities, designed to provide the youth a platform on pan-India basis.”

The ICBL currently consists of more than 450 colleges and over 6000 participants. It is expected that 700 schools from across the nation will participate in this program. The city champions from the ICBL premier league will move on to play in the national championships that will be organized at the end of this year in New Delhi. In the boy’s category, Podar College was beaten by Jhunjhunwala College while VJTI College won the match against Vaze College in the girl’s category.

The winning teams of the championship will their basketball courts completely refurbished while the first and second runners up will receive a prize of INR75,000 and INR50,000 respectively.

On Saturday October 25th, Prime Minister Narendra Modi is scheduled to arrive in Mumbai for the inauguration of the Sir HN Reliance Foundation Hospital and Research Center. Founded in 1925, the hospital has been re-built by Reliance Foundation under the leadership of its Chairperson, Nita Ambani. Last Thursday, PM Modi accepted an invitation from her and her son, Anant Ambani, to inaugurate the hospital.

The Historic Significance of the Sir HN Reliance Foundation Hospital

Formerly known as Sir Hurkisondas Nurrotumdas Hospital, it was the first general hospital in the city and is located in the heart of South Mumbai. Its long history included witnessing the Second World War as well as India’s struggle for freedom. Mahatma Gandhi was among the frequent visitors of this prominent medical facility.

The Silver Jubilee of this facility was celebrated with Sardar Vallabhbhai Patel as the Chief Guest while Jayaprakash Narayan was present at its Golden Jubilee celebrations. Currently in its 90th year, its new avatar will be inaugurated by India’s current Prime Minister.

State-of-the-Art Medical Facility

The new hospital consists of a modern 19-storey tower along with two heritage wings. Through collaborations with John Hopkins, MD Anderson Cancer Center at Massachusetts General Hospital as well as the University of Southern California, the hospital intends to deliver high-quality healthcare.

Furthermore, the facility will also be equipped with infrastructure for robotic surgeries and online conferencing for consultations with specialists from around the world. This state-of-the-art facility will be spread over 8 lakh square feet and will consist of the all the latest clinical technologies across a number of core specialties including diagnostics and imaging.

The current outreach program covers over 310,000 individuals that receive preventive and primary healthcare at virtually no cost by leveraging digital platforms. In addition to this, the Sir HN Reliance Foundation Hospital has also charted out necessary steps to adopt local areas as their commitment towards the Swacch Bharat Abhiyan. The general wards of this facility plan on delivering standardized and high-quality treatment even for those citizens that are at the bottom of the pyramid.

Dreams turned Reality for Nita Ambani

With consistent involvement in healthcare, education, urban renewal as well as rural development, the philanthropic arm of India’s largest private sector enterprise has been able to achieve significant goals under Nita Ambani’s leadership. With the help of a team of top-notch professionals that help her to execute a diverse basket of initiatives, there are few projects that intimidate her. For instance, the Hero Indian Super League that is currently successfully running its first season is another vision by Nita Ambani, initiated to connect the Indian public with the world of sports. Now, the Sir HN Reliance Foundation Hospital and Research Center will add another feather in her hat.



Nita Ambani, Chairperson of Reliance Foundation and wife of industrialist, Mukesh Ambani, is among the many leading personalities from Maharashtra who were named Goodwill Ambassadors of the Swachhata Abhiyan in the state. Other names include Bollywood actor, Abhishek Bachchan; playback singer, Sunidhi Chauhan; and Marathi film star, Makrand Anaspure.Director of Aditya Birla Group, Rajshree Birla; shooter, Anjali Bhagwat; and great-grandson of Mahatma Gandhi, Tushar Gandhiare also included on this list.

The Launch of Swachhata Abhiyan in Maharashtra

The announcement was made by Governor C. Vidyasagar Rao just after the launch of this initiative in the Raj Bhavan and the Mantralaya on Thursday. Prime Minister Narendra Modi, too, made an official announcement on his Twitter account.

The Governor said, “I am sure their involvement with the campaign will inspire many people to work for cleanliness in the society. We have to turn this campaign into a mass movement.” He stressed upon the need to sustain the enthusiasm of the movement for cleanliness. “Lot needs to be done, both in Mumbai and Maharashtra to emerge as the cleanest state in the country. Maharashtra has made pioneering efforts in cleanliness campaign in the form of Sant Gadgebaba Abhiyan. We have to give a major impetus to the campaign under the leadership of the Prime Minister,” he added.

Rao believes that the focus should be on public places such as hospitals, offices, marketplaces and railway stations. In addition to requesting the Chief Secretary and the Mumbai Municipal Commissioner to make the campaign participatory and visible, his own involvement was announced in the form of a visit to the JJ Hospital scheduled on October 18th as a part of a cleanliness drive.

Rao further added, “I have asked them to involve citizen groups, NGOs in all districts and housing societies in cities in the campaign. I have told them to identify selected public places which need urgent cleaning and lead the effort from the front.”

Nationwide Acceptance of the Initiative

Wielding the broom, on October 2nd 2014, Prime Minister Narendra Modi launched the country’s largest ever cleanliness drive. Other states,too, have responded rather favorably to the initiative and have participated with much enthusiasm.

In Madhya Pradesh, for instance, Chief Minister Shivraj Singh Chouhan launched the campaign by also wielding a broom in Bhopal. He urged the citizens to devote at least 2 hours each week towards cleanliness. Furthermore, local MP and Union Minister of Water Resource, Uma Bharti, pledged that she would devote 300 hours a year towards the mission.

In Uttar Pradesh, Union Home Minister Rajnath Singh, made a similar plea to the public. He said, “We will make India clean by 2019. When the country is clean then only it is healthy. In 2014, on the occasion of Gandhi Jayanti, we take a pledge to dedicate a ‘Swachh Bharat’ (clean India) at the feet of Bapu.”

The enthusiasm towards this drive was felt far and wide = from Kerala to Jammu & Kashmir and from Mizoram to Rajasthan.

After a successful 38-year history as India’s largest private sector company, Reliance Industries Limited (RIL) has formally launched an international constitution by the name of Reliance Management Services (RMS). The new framework was unveiled on October 6 before 150 top executives at an event hosted by Chairman and Managing Director, Mukesh Ambani, at his South Mumbai home, Antilla.

The 7-hour-long event included Senior Vice-President of British Petroleum, David Oxley, setting the tone by putting forth questions to Mukesh Ambani on reasons behind initiating this change. A source aware of the developments on RMS said, “Oxley asked simple and quick questions. Mukesh Ambani presented his views.”

What RMS Entails

The new system defines critical policies, processes and execution measures for a number of segments such as HR management and risk management. It spells out what is required to be done within a specified period of time. The new framework comes with guidelines of delegation of authority and clearly highlights how it should flow from top to bottom. It also highlights various processes that need to be executed to indentify risks in a quick and easy manner.

Focus on Employee Welfare

As a part of RMS, the company has announced a series of human resource programs that involve taking necessary measures to simplify various policies and to encourage the wellness of employees.Oxley is also overseeing an HR transformation program at RIL. It is worth noting that British Petroleum has a stake in RIL’s hydrocarbon blocks.

The implementation of this new management system is expected to accelerate the pace at which contemporary HR practices are executed. In addition to implementing a 5-day work week policy last year, RIL has also been able to set in motion a number of fresh initiatives that are being spearheaded by Prabir Jha, Chief HR Officer at RIL. Jha joined the human resources function at RIL from a similar role at Tata Motors.

In addition to simplifying policies and encouraging wellness, these changes also intend to support education and reward talent across levels. Among various significant modifications announced, the most important ones include discontinuation of service bonds and the extension of maternity leave to 6 months.

Sangeeta Singh, Partner at HR consultancy firm, Sanguine Consulting, says, “This level of change will have a significantly positive impact on employee morale, buy-in of the larger organizational vision, individual productivity and most of all, a sense of belonging with the company.”

Mukesh Ambani believes that the average life of the 100 businesses as per Standard & Poor’s list is about 30 years. The inception of RMS is intends to boost RIL’s ability to re-invent itself in this rapidly changing business environment. Furthermore, the formal launch of RMS also intends to institutionalize systems and processes while the company is at the cusp of expansion, diversification and adding more young talent into its workforce.

The world’s biggest refinery, operated by Reliance Industries Limited (RIL) recently reported a rise in profits that exceeded its forecasts. The company reported a 1.7% rise in net profit for its fiscal quarter ending September 30. The company reported a stand-alone profit of INR57.42 billion. This is excluding RIL’s interests in retail and other small segments. This beat the average forecast of INR56.34 billion that was polled by analysts.

The company’s retail business posted its first annual profit in the last fiscal year. After 6 years of making losses, the revenue from this business rose 20% in the quarter when compared to performances a year ago. RIL is optimistic about this business and expects it to grow by 25% to 30% annually. They also believe that e-commerce will be an integral part of its strategy in the future. Co-CFO of RIL, V Srikanth said,“There are some internal discussions that are happening. E-commerce will clearly be a part of the retail strategy.”

Finally, the upstream oil business of RIL posted its second consecutive quarter of double-digit revenue growth. This comes after 3 years of declines that are now boosted by a 34% increase in revenue from its shale gas operations in the United States.

RIL’s Investment Plans

Under the stewardship of Chairman and Managing Director, Mukesh Ambani, RIL has been expanding beyond its core refining and petrochemicals business by investing in consumer-focused sectors such as telecommunications and retail. Owing to stronger refining margins, the company further announced that it would invest up to $9 billion over the next quarters in various business categories.

In its refining and petrochemicals business, the gross refining or profit margin from each barrel of crude oil refined was $8.30 in the quarter. Compared to the same time last year, the margins have gone up by $0.60 per barrel.

Mukesh Ambani said, “Renewed optimism in the domestic economy augurs well for business and consumer confidence, particularly against the backdrop of continuing concerns on global economic growth.”

Furthermore, the Co- CFO at RIL, AlokAgarwal said, “We have spent 450 billion rupees in the first six months, what we can make out is that we’ll spend probably between 500 billion to 550 billion rupees ($8.2-$9 billion) in the next six months.”

Clearing up the Roadblocks

The company is also hopeful towards a favorable decision on the price of natural gas by next month. RIL along with it partners in the Krishna Godavari (KG) D6 block off the east coast of India are in mediation with the government over the hike of gas prices that have already been delayed 3 times.

Agarwal adds, “We are taking what the government is saying very seriously that they will take a decision on gas pricing by Nov. 15.”

RIL continues to be persistent in its domestic oil and gas output as well as in calming investor concerns about the $11.7 billion investment towards 4G telecom services that are yet to be launched. The company has been working in full gear to roll out telecom services early next year.

India’s biggest private company, Reliance Industries Limited (RIL) is now getting a dose of young blood. Children of Chairman and Managing Director, Mukesh Ambani and wife Nita Ambani, Isha and twin brother Akash (23) are believed to be joining the boards of Reliance Jio Infocomm and Reliance Retail Ventures, as directors. Both these businesses are wholly-owned subsidiaries of RIL.

About Akash and Isha Ambani

Akash Ambani completed his undergraduate studies from Brown University, Rhode Island, United States. Heir to RIL, he claims that technology is his passion. His induction as a full-time employee with Reliance Jio was announced earlier this year. He has been involved in marketing and strategy for the launch of the company’s 4G wireless broadband service. He has also been involved in development of products and digital applications. In one of his interviews he said, “So far my experience (at Jio) has been incredible. It’s a lifetime opportunity to contribute to one of the largest rollouts of digital services in the world.”

Once ranked among the world’s top heiresses, Isha Ambani has studied at Yale University and double majored in South Asian Studies and Psychology. Up until recently, she was working as a business analyst in the New York office of global management consulting firm, McKinsey & Company. It is believed that her stint was intended as a preparation for her eventual role in RIL’s consumer businesses.

Other Prodigies of India Inc

It is rather common for scions to pursue a stint at consulting firms or global banks before they are eased into their family conglomerates. Family businesses encourage this to assist the next generation in acquiring broader exposure and global experience.

Daughter of Swati and Ajay Piramal, NandiniPiramal, for instance, too worked with McKinsey as a business analyst before joining her family business in 2006. RishadPremji, son of AzimPremji worked for a few years at Bain & Co in London before joining Wipro. Aditya Mittal, CFO at ArcelorMittal started out in investment banking with Credit Suisse before joining the family concern.

Launching New Businesses and Expansion Plans at RIL

Earlier this year, Mukesh Ambani charted out an aggressive drive into businesses such as retail and telecom that are consumer –focused. The retail outlets of RIL offer everything from foods, groceries, lifestyle and home improvement products, apparel, footwear and even electronic goods. Coincidently, former chairman of Mckinsey India, AdilZainulbhai, has also been appointed as an independent director on the board of RIL in December 2013.

RIL has been working towards the 2015 launch of its 4G telecom services and is expected to invest as much as INR70,000 crores in this regard. On the other hand, RIL’s retail unit announced its first annual profit in the last fiscal year. At the end of June 30, 2014 Reliance Retail posted a revenue growth of 15%. During this quarter, the company also closed 137 stores that run under its “value format”. In addition to this, it also opened 168 stores in scalable or high-margin categories.

Now that revenue growth has shown some stability, the company has been focusing on enhancing profitability.

The IMG-Reliance and STAR India football tournament, Hero Indian Super League (ISL) isscheduled to launch on Sunday, October 12th in Kolkata. The leagueconsists of 8 teams representing Delhi, Chennai, Goa, Pune, Mumbai, Kerala, Kolkata and the North East.

Star-Studded List of Co-Owners

The league has kicked off with a rather starry start with celebrities like Bollywood actors,RanbirKapoor, AbhishekBachchan, Salman Khan and Johan Abraham associated with it. Cricketers, Sachin Tendulkar and SouravGanguly, are also associated with the league as co-owners of different teams. Most recently, cricketers Mahendra Singh Dhoni and ViratKohli bought the Chennai FC and Goa FC teams, respectively.

India’s Leading Brands as Sponsors for ISL

In addition to this, the league has also attracted sponsorships from brands across a variety of categories. 2 months ago, Hero MotoCorp was named the title sponsor of the league for a period of 3 years. Furthermore, sports goods, footwear and apparel brand, Puma, is the official ball partner for the league. Muthoot Capital Services has partnered with the league as the referee’s jersey back sponsor.Other official partners include Dr. Reddy’s Nise Gel, Amul, Maruti Suzuki and PepsiCo.

Commercials Involved

Hero MotoCorp’s deal among many others has been signed for a period of three years. The title sponsorship came at a price tag of INR20 crores per annum. The associate sponsorship was given to Maruti Suzuki for INR8 crores a year. All other official partners have invested about INR3-5 crores per year as sponsorship fees.

This year’s event has been insured for INR600 crores. This includes INR150 crores by the promoters of the league and INR450 cores by the teams. Each team is insured for INR55-58 crores.

The Opening Ceremony for Season 1

The opening ceremony plans to showcase India and its diverse cultures. With about 200 children and 140 dancers participating, the event is expected to be a spectacular one. Priyanka Chopra is also believed to be performing at the ceremony. The audience is expected to comprise team owners and celebrities like Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited; his wife,Nita Ambani, Chairperson of Reliance Foundationand Bollywood star, Amitabh Bachchan. Chief Minister of West Bengal, Mamata Banerjee, will be the Chief Guest at the event.

The celebrations are scheduled to start at 5.30 p.m. before the kick-off at 7.00 p.m. Viewers from across the country will be able to watch the tournament on STAR India Network, the league’s official broadcaster as well as 33% stakeholder in Football Sports Development, the promoting entity of the league. Football Sports Development is a joint venture between IMG-Reliance and STAR India. Hero ISL is scheduled to be aired in 5 languages: English, Hindi, Bengali, Malayalam and Kannada.

It is no longer mandatory for a defense venture in India to ensure that a single Indian entity holds at least a minimum of 51% in a local defense venture. In special cases, 100% foreign direct investment (FDI) has been allowed. The change in foreign ownership limits arrives after the campaign pledge made by Prime Minister Narendra Modi to relax some rules with an aim to attract more FDI.

How this Impacts the Private Sector

This small change has helped Reliance Aerospace Technologies Limited and Punj Lloyd Industries Limited to acquire long-awaited licenses. The earlier laws did not allow Reliance Aerospace to receive licenses to manufacture weapon launchers for combat aircraft. This is because the promoters held 45.3% in Reliance Industries Limited.

Similarly, the promoters of Punj Lloyd cumulatively have 37% stake in the company. This restricted wholly owned subsidiariesfrom acquiring licenses to manufacture rocket launchers, combat vehicles and torpedoes.

Opening Up the Defense Sector

While the government did not reveal any details, an official statement suggested that the committee has passed19 proposals for defense manufacturing licenses presented by a number of large Indian business houses such as the Mahindra Group, Bharat Forge Limited and the Tata Group.

In addition to this, in at least 14 other cases, the government has informed the companies that there is no longer a requirement these licenses. This included proposals such as the one put forth by Tata Advanced Systems to manufacture spacecraft and aircraft components. In addition to this, Mahindra Aerostructure’s proposal to make aircraft parts and Reliance Aerospace’s flight control system manufacturing also no longer require licensing.

Even before the FDI rules were altered, the Department of Industrial Policy and Promotion reduced the number of items in the defense sector that require licenses for manufacturing. The department also freed dual-use items from licensing requirements. Items such as aircraft components and radars that also have civilian use no longer require licenses for manufacturing.

Easing Off Rules

For decades, the defense ministry has looked down upon the entry of the Indian private sector in spite of the fact that the government relied on imports that often involved middlemen. During the UPA’s term in office, the repeated plea made by the commerce and industry ministry to increase the FDI cap in defense was blocked by then minister, AK Antony.

It is known that India is among the world’s largest importers of arms and needs support in modernizing its military. Building equipment locally can help save significantly on foreign exchange. In recent months, the overall mood seems to have changed as the Department of Defense Production supports foreign as well as private capital in local ventures.

The government is also working on further slackening the rules. This includes doing away with the annual capacity ceiling in industrial licenses and permission to sell without approval licensed items to other entities that are controlled by state governments, PSUs, the Home Ministry and other valid, licensed defense companies.

In the hope that diesel prices will soon be deregulated from government control, Reliance Industries Limited (RIL) may restart some of their fuel pumps. In addition to this, executives aware of the development hint that the company may lease fuel retailing outlets to public-sector oil-marketing companies.

Private versus Public Players

In 2002, private companies including RIL and Essar Oil were able to capture as much as 15% of the fuel retail market. Sales declined and losses mounted when private marketers were unable to compete with the subsidized priced offered by state-owned companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation. By 2008, RIL was compelled to shut down its 1,432 fuel outlets.

RIL’s Plans to Restart its Fuel Pumps

With the re-entry of private players, the industry is expected to revive and create an environment spurring healthy competition. In light of the expectations that the prices of diesel, the most consumed fuel in India, will be deregulated, RIL is working towards developing a plan that will optimize returns.

An industry executive who is aware of the development said, “RIL has started talking to dealers to re-start the petrol pumps. Their strategy could be a mix of leasing out some pumps to OMCs and running some others on their own.”

A senior official from HPCL says, “There is an offer from Reliance Industries for leasing. But it is still to be evaluated. Some of their pumps are at a good location, so leasing them would save us cost of setting up a pump. … Once we have clarity on diesel pricing, we will look at the economics of the proposal.” Likewise, RILis waiting for better clarity on the deregulation of diesel prices.

However, official queries sent to RIL, Indian Oil and Bharat Petroleum Corporation Limited remain unanswered in this regard. Some executives at oil marketing companies (OMCs) hinted on condition of anonymity that RIL has initiated talks but the discussions are at a very early stage, where the proposals are yet to be considered by the companies.

Diesel Price Deregulation Imminent

The recent changes in the pricing regime raise hopes towards the imminence of deregulation of diesel prices. Since January 2013, the government increased prices by 50 paisa per liter each month. This move was made to cut the government’s subsidy bills.In addition to this, the global prices of fuel have also softened and the rupee has appreciated against the US dollar. These factors have helped OMCs make a profit on fuel.

If global prices continue to stay at current levels of under $95 a barrel and if the value of the rupee continues to remain stable against the dollar, consumers will further benefit with a reduction of diesel rates by INR2 to 2.50 per liter along with a policy decision to decontrol prices.

On Thursday, September 25th, Prime Minister Narendra Modi launched the “Make in India” campaign. Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited (RIL) described the launch of this campaign as a historic day for Indian industry. In addition, he pledged that his company will create 1.25 lakh new jobs over the next 12 to 15 months to support this movement.

Mr. Ambani said, “PM Modi dreams and does, working 14 hours a day and motivates a billion Indians to dream and do.” He also believes that the program will help make our country globally competitive and put it on a fast-growth trajectory. “I firmly believe 8-10 per cent for a long period of time is the right potential for India,” he added.

According to him, the outlook of international investors has significantly changed since Narendra Modi came into power. He also thanked the Prime Minister for his leadership and inspiration to India Inc. He added that the Prime Minister’s vision of a digital India will also go hand-in-hand with the “Make in India” campaign.

Further, Mr. Ambani pointed out how the success of India’s mission to Mars on 24th September has exhibited what our country can achieve. The Mars mission cost less than INR7 per kilometer, which is less than the cost of travel by auto rickshaw in many large Indian cities.

Other business leaders such as Cyrus Mistry, Chairman of Tata Group; and Kumar Mangalam Birla, Chairman of Aditya Birla Group, also expressed their support towards this campaign.The former remains fully committed to investing in India while the latter believes that the campaign is a clarion call that can take the Indian economy to great heights.

Mukesh Ambani’s Visit to the US

Pressing prior engagements did not allow Mr. Ambani to be part of the business delegation that accompanied Narendra Modi on this visit to Japan last month. However, he is currently part of the business delegation in New York City and Washington D.C. and is attending some of the events that have been organized in honor of Prime Minister Narendra Modi’s 5-day visit to the United States.

Sources revealed that Mr. Ambani was scheduled to attend a dinner reception hosted by S Jaishankar, Indian Ambassador to the US, at The Pierre, a Taj Hotels-owned luxurious heritage hotel, on September 28th.On 30th September, he is scheduled to attend a reception hosted by the US-India Business Council (USIBC) at the Andrew Mellon Auditorium in Washington, DC.

RIL is known to have significant dealings with the United States. In addition to selling fuel, the company also has 3 shale assets in the country in which it plans to invest an addition of $2 billion. This investment will be made towards the extraction of natural gas and oil from the sedimentary rock formations. RIL has already invested $7.3 billion since its entry into the US shale market in 2010.