Ambani Case Study

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Introduction: - It is one of the most famous and celebrated battle in Indian corporate history. The ancient system that argues with the nouveau rich. Old-world Ballard Estate in Bombay taking on brash new Nariman Point. The Warriors :- Reliance Industries Ltd (RIL) run by Dhirubhai Ambani and Bombay Dyeing Ltd (BDL) led by Nusli Wadia War Reason / Battleground :- Bombay Dyeing was one of the textile kings in the pre-Ambani era, and the battle with Ambani began when both looked at the sunrise industry of polyester for growth. That's where the conflict erupted into covert - and even overt - warfare. PTA and DMT are two chemicals used to produce polyester which reacted to create a national explosion in the 1980s. Reliance Industries Ltd using PTA and the Bombay Dyeing Ltd uses DMT produces polysteras the main input. The country's largest manufacturer of polyester filament yarn (PFY) and polyester staple fibre is Reliance Industries. It also makes two raw materials: purified tere-phthalic acid (PTA - …show more content…

Ambani “Market” win:- The real battle that Ambani won was not just in the policy-making area, but in the capital markets. His vision of achieving global scale was a winner, and efficient project management gave him cost advantages that were unrelated to political influence alone. In those days, the biggest cost for any industrialist was high interest rates. Indian banks and project financial institutions - IDBI, ICICI, etc - were charging extortionate interest rates at which no project could be viable without manipulating the system. Ambani took a different route to cut his capital costs. He seeded the equity cult, and converted his huge debts at high premiums into equity. His effective cost of capital thus came to match the cost of comparative projects abroad. And thanks to his equity raising abilities, his projects always were set up at the lowest cost. And the rest is history. Time line

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