Anil Ambani, the son of Indian business mogul Dhirubhai Ambani, rose to prominence as one of the world’s most successful businessmen. Anil was celebrated for his exceptional business acumen and active leadership within the Reliance Group, amassing significant wealth. Once the sixth richest person in the world, Anil faced a stark downfall, ultimately declaring bankruptcy amidst mounting debts worth crores.
This marked a dramatic turn in the fortunes of Anil Ambani, encapsulating the highs and lows of his journey.
Anil Ambani’s Journey with Reliance Power
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Anil Ambani expanded his business portfolio by entering the power sector through the establishment of Reliance Power. He notably achieved a significant milestone by attaining full subscription to the Reliance Power IPO within less than a minute, making it the largest IPO of its time. By 2007, Anil’s total wealth exceeded Rs. 4 lakh crores, highlighting his considerable success and impact in the business domain.
Reliance Power operated two gas-fired power plants at Dadri and Shahpur, utilizing natural gas for electricity generation. However, Anil Ambani relied on his brother, Mukesh Ambani, to obtain the necessary natural gas supply.
Initially, there was an agreement stipulating that Reliance would supply natural gas to Reliance Power at a rate of 2.3 dollars per unit. However, Mukesh raised the price, prompting Anil to file a breach of contract case against him in the Bombay High Court. Mukesh contested this decision in the Supreme Court, which ultimately ruled in Mukesh’s favor. Left with no alternative, Anil had to purchase costly gas.
The closure of his long-awaited Dadri project left Anil devastated. By 2015, all of his companies except Reliance Capital were on the brink of collapse.
Anil Ambani’s Remarkable Revival: The Resurgence of Reliance Power
Fast forward to 9 years, Reliance Power has reached a major milestone by successfully clearing all outstanding debts, transforming into a debt-free entity on a standalone basis. With a debt load of around Rs 800 crore, the company has diligently repaid loans to several financial institutions, such as IDBI Bank, ICICI Bank, Axis Bank, and DBS, through multiple settlement agreements executed between December 2023 and March 2024.
Also Read: Meet Anmol Ambani, Anil Ambani’s Savior Son Who Turned Misfortune Into A Rs 20,000 Crore Empire
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The company strategically employed the proceeds from the sale of its developmental rights in Arunachal Pradesh’s 1,200 megawatt hydro-electric project to THDC for Rs 128 crore, and its 45 MW wind energy project in Vashpet, Maharashtra to JSW Renewable Energy for Rs 132 crore, effectively eliminating its debts.
Reliance Power, with an equity base of Rs 4,016 crore and backed by more than 3.8 million retail investors, operates with a total capacity of 5,900 MW. This encompasses the well-known Sasan Ultra Mega Power Project (UMPP), a large-scale integrated coal-based power plant generating 3,960 MW, along with the 1,200 MW Rosa Thermal power plant in Uttar Pradesh.
The share price of Reliance Power, owned by Anil Ambani, has experienced an upward trend over the past week, witnessing a notable increase of approximately 22%.
Stock market analysts suggest that since Reliance power has achieved debt-free status, leading to improved operational efficiency, which has drawn investors’ interest towards Reliance Power shares. They anticipate that Reliance Power shares, which have recently surged to Rs 28, may soon reach the Rs 36 per share mark.