As author Gita Piramal records in her book Business Maharajas, the tussle between a Calcutta-based Marwari bear cartel and Reliance was the first clear instance which made Dhirubhai, as he is now fondly known in market circles, the uncrowned king of the bourses and a legend in his lifetime in Indian industry.
Ms Piramals book chronicles how brokers loyal to Dhirubhai created, virtually overnight, the Friends of Reliance Association to pick up the large chunk of shares which the Marwari cartel was dumping in the market. They reportedly bought up 8.57 lakh shares of the 11 lakh shares which the cartel had short-sold, thereby saving the stock from certain collapse. To break the cartels back, they even insisted on delivery and charged an unprecedented backwardation, or undha badla, of Rs 50 per share. And thus was born the legend of Dhirubhai. A man who, it is now said, not only created Indias largest corporate house, but shared his wealth with shareholders creating unparalleled loyalty among investors. His basic principle: if his shareholders and suppliers and everyone connected to Reliance earned money, Reliance would also generate wealth that way.
As Dhirubhai Ambani battles for his life at the Intensive Care Unit of Mumbais upmarket Breach Candy Hospital, the markets which have so often chanted his name in awe are waiting for every bit of information, every statement emanating from the Ambani family. In Mumbais streets, trains and the crowded lanes surrounding Dalal Street, the predominant topic of discussion on a monsoon-washed day is Dhirubhais health condition.
So what is it that keeps the Dhirubhai mystique alive at the markets
Says a frontline investment banker: The legend of Dhirubhai is an enduring one in the markets. There have been many stories of his successes which the market has heard over the years.
Broking sources say signs of Dhirubhais vision were clear when, after his first stroke 16 years ago, he clearly groomed his two sons Mukesh and Anil to take over the reins of his empire. Thereafter, he became a kind of philosopher and guide for his sons, while the two of them grew in stature, says a broker who tracks Reliance closely. Another factor which they cite as a key one is that despite hitting success himself, he did not choose merely to let his sons join him as they were, but insisted on quality educational qualifications for both of them. The sons, in turn, have invested in the industry and in people.
But as concern over Dhirubhais health grows, the stockmarkets are showing signs of concern. All Reliance group stocks were down on Tuesday, and the same trend continued on Wednesday. Flagship Reliance Industries fell Rs 6.55 to Rs 267.10 on The Stock Exchange, Mumbai (BSE), while Reliance Petroleum was down 40 paise to Rs 23.75. Volumes continued to be high, with BSE seeing a volume of 14.19 lakh shares in Reliance Industries, while on the National Stock Exchange, the volume was 31.40 lakh shares. On Tuesday, the combined volume on both bourses was 1.5 crore shares.
However, Dhirubhais battle with bears had been continuing over the years and, despite the advent of the foreign institutional investors (FIIs) these days, signs of that old tug-of-war still show up sometimes. Agrees a leading broker, somewhat emotionally: The punter community knows no emotion. They would want to make short term gains at every opportunity. The same case happens when they press sales in a war-like situation, instead of being patriotic and buying stocks to support the market. And a bear cartel would want to take advantage of such situations whenever they arise.
But the goodwill which Dhirubhai enjoys is clear. Recalls former BSE old-timer and former board member Shirish Dave: His vision is tremendous. Even those who enjoyed the benefits of license raj have had to bow to competition now. But Dhirubhais foresight has made Reliance grow into a world-class organisation.
Brokers say some old-time shareholders had invested in Reliance in awe of the legend of Dhirubhai. Some of them may be selling some small parts of their holdings as they hear of his illness, something which punters may be taking advantage of, they add. The old-timers among the investors may be slightly worried about the future, though most investors know the two sons are equal to five directors each and comprise a very strong layer of future institutional leadership, says a broker.
Because of Dhirubhais natural instinct for trading even during times of crises, his fan following in the markets increased year after year, Mr Dave points out. Says another broker, Pradip C Doshi: He cultivated the culture of putting money in initial public offerings and debentures. He is the pioneer of the concept of convertible debentures, something other corporates are following now. He adds that Dhirubhai showed other corporates how to borrow from international markets at lower costs and repay local high-cost loans. The 30-year, 100-year Yankee bonds were unimaginable before he made them fashionable, brokers say.
Theres much talk of how Reliance stocks helped many a father marry off his daughter, or buy a house when the family needed it most. Those are among the many investors who have remained loyal to the Reliance group over the years. A debt which they say they still owe to Dhirubhai. And thats the goodwill which the Reliance group patriarch and the Ambani family is depending on the most as Dhirubhai puts up his bravest fight yet.