WHY RELIANCE BECAME THE MOST IMPORTANT STOCK ON NSE INDIA?

Why did Reliance Industries Became The Most Valued Stock On NSE India?

Mota Bhai or Mr. Mukesh Ambani is the wealthiest person of India – this we all know, but do you know that Reliance Industries have made its shareholders extremely rich too. And rich, not only in terms of capital gains, but in terms of a good night’s sleep by knowing that they have put their money, trust, and dreams in the safest hands in the industry. Today, RIL is the most valued stock of NSE India with a whopping market cap, but it wasn’t always like this. In today’s blog, we discover how Reliance became what it is today. Are you excited? Let’s dip in…!!

The Beginning

– Modest, As The Ambanis, Describe It

The golden years of Reliance Industries started when Late Mr. Dhirubhai Ambani decided to leave his then work in Yemen and came to India. Soon in India, the senior Ambani started trading yarn in a small apartment office in Mumbai. Little did he know that he was going to be the founder of India’s largest company.

In 1977, the founder of Reliance decided to bring on the IPO of Reliance Textile Industries in the Indian stock market and took the market by storm. The IPO was oversubscribed by seven times when stock market participation was half more petite than now…!! So it’s right to say that Mr. Ambani had the trust of millions of Indians from the beginning.

Living Up To The Faith – Motabhai Enters The Story

After multiplying the wealth for years, the senior Ambani supported our beloved Motabhai or Mr. Mukesh Ambani. He started a glorious career with Reliance Industries by focusing on backward integration and set up Reliance’s first mega-manufacturing factory at the Patalganga in mere 18 months.

With this double engine growth of Reliance, it became the world’s largest polymer producer by 1991. By then, the seeds of confidence of the Indians in Reliance Industries had grown into lush green trees. But behind all this confidence in growth, there was an incident that made Reliance Industries what it is today. It was when Mr. Dhirubhai Ambani justified the term – “Lanka Laga Dena” for the Kolkata bear cartel.

Reliance Vs. The Bear Cartel – 1980s

Reliance opened a new issue at 10 rupees per equity share and soon, in about a decade or so, hit a high of 186. This was massive, and the wealth created was more than 180 times. Bears being bears, found a shorting opportunity at the wrong place. Most Indian retailers at that time had Reliance shares in their portfolio. Moreover, Reliance was launching a rights issue then. Bears found some cracks in the castle of glass and started short selling the Reliance shares. On 18th March alone, bears sold more than 3.5 Lakhs of equity shares. This created panic among the retailers who had faith in Reliance’s dream. Little did the retailers and the bear cartel knew that there were no fault lines in Reliance, and it had the full support of its associates.

In reply to the bears’ short selling, the NRI and HNI shareholders of Reliance started taking the delivery of Reliance, and the bears eventually had to break off their short streak. The short covering was such crazy that from Rs. 121, the share’s price shot up to Rs. 201. That’s the incident in the history of Reliance that justified Mr. Dhirubhai Ambani as the supreme leader of the Indian Private Enterprises world.

This action of Dhirubhai and associates relieved the retailers that their money won’t go in vain if they put it in the fate of Reliance. Moreover, Reliance Industries have been a constant participant of the Nifty 50 index since its inception. All this serves the fact that Reliance is the most valued stock on NSE India. So it’s right to say that Reliance has been the favorite of retailers and institutional investors.

Reliance’s New India Oil Revolutions – the 2000s

After being the polymer-producing giant, Reliance now surfed in the high tides of the petrochemical industry and soon set up India’s biggest refinery in Jamnagar. Soon, Mr. Ambani voyaged Reliance to become the largest private petrol producing firm.

Values & Growth Went Hand In Hand At Reliance

When Reliance set up the refinery in Jamnagar, they knew that it might affect the local environment. The masterminds of the mammoth company came up with an idea to improve the city’s background as well as add cushion to their growth. They grew Asia’s largest mango orchard. It added up to make the atmosphere clean as well as added to the revenue of Reliance Industries.

Post The Great Dhirubhai Ambani – A New Chapter

What intensified the impression of Reliance in the Indian public was what followed the death of Mr. Dhirubhai. Mukesh and Anil, two brothers, succeeded the business from their father. After a decade, Mukesh Ambani’s share prices stand at a premium of 2100+ rupees, whereas the shares of Anil Ambani are mere penny stocks. This further clarifies why Reliance Industries is so important to the people of India.

Anticipating The Future Early On – Data

Reliance’s voyager Mr. Ambani identified opportunities around Data and started a new data revolution, and launched Jio in India. With Reliance Jio, it was a matter of months, and Ambani took over the Indian telecom market strategically. More than five telecom companies shut down after the aggressive growth of Reliance Jio. Jio made India the data hub of the world by offering the cheapest data to Indians.

Takeaway

With the bright leadership of Mr. Mukesh Ambani, Reliance Industries and its shareholders achieved great heights of success only to beat the ordinary. Are you extraordinary too, by having the Reliance shares in your portfolio? And not only that but also the mindset and power of creating a sustainable business starts from the small beginning with strong willpower.