Newsweek International Edition
Bigger, Faster, Better India's top tycoon hopes to kick the country's nascent boom into hyperdrive by remaking its stores, farms and even its biggest cities.
By Ron Moreau and Sudip Mazumdar Newsweek International
July 17, 2006 issue - Mukesh Ambani has been India's Mr. Big for a long time. By all accounts, he is the country's most influential private citizen, and the businessman who thinks bigger than the rest in this rising economic superpower. He was all that even before a bitter internal feud led to a split in his family conglomerate. The breakup, finalized in January, left Mukesh in control of the larger (and largely petrochemical) share, Reliance Industries, and that behemoth has seen its fortunes soar ever since. It is now India's largest private-sector enterprise by any measure: revenue ($20 billion in 2005), profit ($2 billion), or share of Indian GDP (3.5 percent). Last week its stock closed up 15 percent since January, making Reliance India's biggest company by market cap (about $35 billion). Mukesh, who was already the world's 38th richest person before the split, according to Forbes, is now considerably richer. He says that while most family empires destroy wealth when they divide, the parting of the Ambanis was a "win-win" proposition.
Now, Mr. Big's ambitions are bigger than ever. Since the breakup, Ambani, 49, has finalized plans to invest more than $11 billion over the next decade to build two new satellite cities outside creaking, overcrowded Mumbai and Delhi. He foresees these metropolises emerging within just four years, each with a population of 5 million people making $5,000 a year, on average (or seven times India's norm), and hosting top multinational companies. And that is all pretty simple—a development on steroids—compared with the idea that really gets Ambani going.
Ambani's favorite scheme aims to revolutionize in one swoop two of India's largest but most backward sectors: farming and retail. Despite boom times, India is still a nation where 100 million mostly small farmers work with ox and plow, where 96 percent of retail stores are mom-and-pop shops and most of the roads between farm and store are mud tracks. Ambani plans to invest $5 billion by 2011 to put both the farms and the stores on the road to modernity, connect them through a distribution system guided by the latest logistics technology, and create enough of a surplus to generate $20 billion in agricultural exports annually.
In China, these plans would be hatched by the Communist Party. In India, the government is neither visionary nor efficient enough. But Mukesh Ambani is both. "This new business model excites me the most," said Ambani, wearing a white polyester-blend, safari-style shirt and dark blue slacks, in an exclusive interview in his Mumbai office recently.