25/04/2020
Reliance has been at the forefront of the Indian industry, innovation and corporate brutality. Some love this company, some hate it- some ever go as far as labelling it.
Say or feel what you may, but there is no denying the fact that Reliance is a global corporate juggernaut. There is no stopping it!
While some say its rise can be credited to its ruthless use of tactics, opportunistic adaptability, strong financial control, while others feel its outrightly lucky.
What I believe, in my analysis of Reliance, is the secret for its success is a cold emotionless corporate governance and remaining grounded at the fundamental economic principle of efficiency.
To illustrate the same, refer to picture 3. Reliance is a heavily leveraged company, that means its costs of capital is low. So is Vodafone-Idea's. But debt, it cuts both ways. For the last 3 decades, Reliance has been at the hilt of the sword called debt, while many others have been at the tip of the sword, only to be slaughtered.
I credit the rise & rise of Reliance not to the external layer of timely diversification, effective use of the political machinery or effective financial control, but to the genius of Mr.Mukesh Ambani. He'll be remembered for his ability to put Indian industry on the global map, for leaving behind the legacy of middle-class success, far-sighted corporate vision and an iron fi**ed corporate grip.
The Covid era is a proof of Mr.Ambani's capacity to put economic efficiency ahead of personal emotions. Reliance is still minting money for investors, while the market bleeds.
I am certain that as long as Mr. Mukesh Ambani is holding the bed rock of Reliance Industries, investor money will reap returns.
This post is to many forthcoming years of harvest from Reliance Industries. @ Kolkata