Mukesh Ambani’s $22 Billion Coup Propels Him Back Into The Ranks Of The World’s Top 10…

While much of the business world found itself hunkering down after the outbreak of the Covid-19 pandemic, Asia’s richest man, Mukesh Ambani was busy scripting what can only be described as the new abnormal. In just under two months—58 days to be precise—Ambani’s oil-to-telecom giant, Reliance Industries, raised more than $22 billion, amid a strict nationwide lockdown in India.

This fund-raising feat buoyed investor confidence and Reliance’s shares, propelling Ambani back into the ranks of the world’s top 10 richest billionaires after a nine-year hiatus. Now at No. 10 with a net worth of $64.1 billion, Ambani has added $27.3 billion to his fortune since the Forbes World Billionaires list of March, where he was at No.21 with $36.8 billion.

This is not Ambani’s first appearance in the world’s top 10 richest. He first broke into rarefied group in 2008, when he was at No.5 with $43 billion and remained in the top 10 for the next three years. In 2009, he was at No. 7 though his net worth had plummeted to $19.5 billion in the aftermath of the 2008 global financial crisis. In 2010, he had climbed to No. 4 with $29 billion, dropping to No. 9 a year later with $27 billion, amid a global recovery. As others outpaced him, he fell out of the top 10 in 2012. 

Ambani’s resurgence has much to do with how the tycoon has pivoted his oil and petrochemicals giant into fast-growing new ventures in telecom and retail. “Mukesh has changed the face of Reliance from petrochemicals to technology,” says fellow billionaire Harsh Goenka, chairman of the RPG Group. “That global investors are scrambling to pick up a piece of Jio during a global pandemic, is nothing short of incredible.”

More than two-third of the $22 billion funding was raised by offloading a 25% stake in Jio Platforms, Reliance’s fast-growing telecom and broadband unit, to some of the world’s shrewdest investors. This group included billionaires Mark Zuckerberg, whose Facebook picked up a 10% stake for $5.7 billion and private equity titan Robert Smith’s Vista Equity Partners, which paid $1.5 billion for a 2.3% stake.

Last month, Ambani also successfully concluded a $7 billion rights issue of Reliance’s shares, the company’s first in three decades. The tycoon subscribed for more than half of that offering, a purchase that will cost him $3.6 billion. Investors seem to concur with Ambani’s personal vote of confidence in Reliance’s future growth- shares of the company have gained more than 80% in the past three months. (Disclosure:Reliance Industries owns Network18, which publishes Forbes India)

That boost, says Sudeep Anand, head of institutional research at IDBI Capital Markets & Securities is partly due to “the pedigreed investors who have come on board and also because Reliance has always delivered.”

Last August, Ambani had announced that Reliance, which has invested $46 billion to build out Jio, would have zero net debt by March 2021. With net debt of $21.2 billion as of March 2020, the company is set to achieve that target once all the funds come in. Next on Ambani’s agenda is to list both Jio and Reliance’s retail business. That could possibly give him a fighting chance of reclaiming a spot in the world’s top 5 richest.