Dhirubhai Ambani is credited with wide spreading if not introducing the equity cult in India. The very fact that some shareholders meetings had to be held in stadiums is testimony to his sway over his stakeholders. The number of investors he benefited(marriages, businesses, studies abroad etc have been said to be financed by reliance). I had written an article a couple of years ago which featured Dhirubhai. Here are some of the extracts related to the share market partly from Gita piramals book among others:-
Dhirubhai was the first Indian Industrialist to appreciate the needs ot the ordinary nvestor and his needs. He turned for funds to the only other option he had: the public.Mobilizing funds from the small investors was a major departure from normal practice at that time as most businesses used to raise funds from state owned financial institutions such as IFCI and IDBI. Ambani believed that the most generous dividends could not make the shareholder rich but capital appreciation of his shares would. It took him half a decade to propagate his philosophy but once it took root, it changed the mindset of corporate India. He coined the term mega issue and with the exception of 1977, the honor of the years largest issue goes to Reliance for almost a decade and a half.. He introduced the equity cult in every small town in India. He single handedly energized the Indian capital market.
Although he was not a pioneer in introducing the conversion of convertible debenture into shares, he was the first to do it on a mega scale.Dhirubhai relentlessly lobbied the govt until it accepted the concept. Investors liked the idea so much that the 1979 issue was oversubscribed six times and convertible debentures became the instrument of choice for management and workers. and succeeded to such a degree that he even coined the idea to convert non- convertible debentures because on conversion of non convertible debentures to shares , the return to the shareholder would have been much higher than what he would have got from debentures.
At a time when India's equity market was in the bear phase, the Ambanis were the first major to tap the overseas debt market with long-term debt, including the 100-year Yankee bond
Paper Shuffling. Examples: the first Indian company to make a GDR issue, the first to get a Moody's and S&P rating, the first Asian issuer of a 100-year Yankee bond.
There was an interesting incident when a bear syndicate tried to hammer down his share prices. Reliance bought all the shares and demanded delivery. In India , technically management cannot buy its shares and so friends of Reliance association was an organization created to buy shares. The stock exchange had to close down because of this which was an unprecedented incident in Indian business history.
Dhirubhai was the first Indian Industrialist to appreciate the needs ot the ordinary nvestor and his needs. He turned for funds to the only other option he had: the public.Mobilizing funds from the small investors was a major departure from normal practice at that time as most businesses used to raise funds from state owned financial institutions such as IFCI and IDBI. Ambani believed that the most generous dividends could not make the shareholder rich but capital appreciation of his shares would. It took him half a decade to propagate his philosophy but once it took root, it changed the mindset of corporate India. He coined the term mega issue and with the exception of 1977, the honor of the years largest issue goes to Reliance for almost a decade and a half.. He introduced the equity cult in every small town in India. He single handedly energized the Indian capital market.
Although he was not a pioneer in introducing the conversion of convertible debenture into shares, he was the first to do it on a mega scale.Dhirubhai relentlessly lobbied the govt until it accepted the concept. Investors liked the idea so much that the 1979 issue was oversubscribed six times and convertible debentures became the instrument of choice for management and workers. and succeeded to such a degree that he even coined the idea to convert non- convertible debentures because on conversion of non convertible debentures to shares , the return to the shareholder would have been much higher than what he would have got from debentures.
At a time when India's equity market was in the bear phase, the Ambanis were the first major to tap the overseas debt market with long-term debt, including the 100-year Yankee bond
Paper Shuffling. Examples: the first Indian company to make a GDR issue, the first to get a Moody's and S&P rating, the first Asian issuer of a 100-year Yankee bond.
There was an interesting incident when a bear syndicate tried to hammer down his share prices. Reliance bought all the shares and demanded delivery. In India , technically management cannot buy its shares and so friends of Reliance association was an organization created to buy shares. The stock exchange had to close down because of this which was an unprecedented incident in Indian business history.