While addressing shareholders at 40th Annual General Meeting (AGM) ofReliance Industriesin 2017, ChairmanMukesh Ambanigot emotional while remembering his late father,Dhirubhai Ambani. Mukesh’s mother Kokilaben Ambani burst into tears.RelianceJio had come very close to the dream that Mukesh Ambani’s father had decades ago. Dhirubhai used to say if you made a phone call cheaper than a postcard, you would revolutionise the lives of millions of Indians. Mukesh Ambani’s Reliance Jio not only made a phone call totally free, it made even the handset cheaper than a postcard as it came free with a refundable deposit.
“I can feel as if he is sitting here, smiling and talking to me and to all of you,” Ambani said at the AGM. “I hear him telling me, ‘Now, you are in my place. You have the responsibility to protect Reliance and promote the interests of all its shareowners, partners and employees. I am confident that you will take Reliance to greater heights’.” His mother, Kokilaben, was in tears and the audience applauded and broke into chants of “We love Jio”.
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Offering CollegeCourseWebsiteIIM KozhikodeIIMK Advanced Strategic Management ProgrammeVisitIndian School of BusinessISB Chief Digital OfficerVisitUniversity of Western AustraliaUWA Global MBAVisitIndian School of BusinessISB Chief Technology OfficerVisitThat was hardly how an AGM — a dreary, number-crunching exercise between the shareholders and the company management — is generally expected to go.The 46th AGM of Reliance on MondayWhat will happen at the 46th AGM of Reliance on Monday, August 28? While nothing can be said about what Ambani will announce at the AGM, one thing is certain — as Reliance AGMs go, this one too will be one of the biggest annual corporate events of India, full of business announcments as well as personal outpourings.
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AGMs of companies are mostly sombre events offering little space for emotional expression or deep audience connect. But an AGM of Reliance Industries is a different affair altogether. It is more like a rock concert or a big fat Indian wedding than an AGM, at least that’s really how Reliance AGMs looked like in the times of Dhirubhai Ambani, the founder of Reliance Industries.
How Reliance AGM turned into a popular eventDhirubhai is credited with building an investor cult around Reliance and populariisng the equity culture in India. He was known for never disappointing his shareholders given the steady progress of Reliance over time.
Reliance Textile Industries’ IPO in 1977 created history by unleashing the animal spirits. The issue was oversubscribed seven times. After that, Dhirubhai became an investor’s icon, who would address thousands of shareholders at Reliance AGMs with the zest of a rock star, the rockstar that did not sing songs but poured out dividends. Bankers and brokers still talk about the AGMs Dhirubhai conducted at the Cooperage Grounds in Bombay in the early 1980s. “Many up-and-coming promoters like Shashi Ruia of Essar Group thronged the Cooperage to see Dhirubhai in action — interacting with small retail investors. And true to his word, investors did not lose money on the company Dhirubhai founded,” a retired banker had told ET two years ago. “It’s another matter that investors lost a lot of money in Anil Ambani’s Reliance Power issue.”
Sajjan Jindal was another emerging industrialist who went to Reliance AGM to pick insights into business. Dhirubhai Ambani would react to the shareholders, Jindal once said. If someone complained, Dhirubhai would respond very passionately. Dhirubhai’s address to the investors was nothing short of a masterclass in business. It was Dhirubhai’s self-belief, vision and inspirational leadership that attracted hordes of small investors who helped Reliance build itself up on retail equity investments that offered Dhirubhai more freedom to operate than institutional investments. He was known for taking shareholders by surprise at the company’s AGM by announcing investor-friendly proposals. Between 1980 and 1985, the number of retail investors in India grew from one to four million, and nearly one in four of those investors owned shares in Reliance.
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“Probably the pinnacle of Dhirubhai’s popularity was reached on 20 May 1985, when Reliance hired Bombay’s Cooperage Football Grounds as the venue for the annual general meeting to approve results for 1984,” Hamish McDonald writes in his book ‘The Polyester Prince’ on Dhirubhai Ambani.
“About 12,000 shareholders turned up to sit under canvas awnings stretched above the grass and to watch the directors via television monitors. It was reported as the first AGM ever held in the open, and the largest ever meeting of shareholders, attracting note just for that fact the next day in The Financial Times of London. Dhirubbai arrived in a suit, but soon got down to shirtsleeves to report the previous year’s 58.6 per cent jump in net profit and to list various new projects totalling Rs 6.72 billion in outlays. India had recently had its first taste of hostile takeover bids when the London-based expatriate Indian, Swraj Paul, had bought into the machinery manufacturers DCM and Escorts. If anyone tried that with Reliance, they would have to deal with 1.2 million loyal shareholders, said Dhirubhai to loud applause. The shareholders enthusiastically approved a name change symbolising Dhirubhai’s wider ambitions. The word ‘Textile’ was dropped from the company’s name. After approval by company regulators in June, it was simply Reliance Industries Ltd.”
Some people would describe Reliance AGMs as big fat Indian weddings where shareholders feel like one extended family amid much celebratory vibes. AGMs had to be organised at large venues such as Brabourne stadium and Maidan grounds covered with big tents where free food was distributed. They were marked by loud whistling, clapping and cheering some of which still happens when the AGMs are held within auditoriums.
In 2018, when the AGM at the Birla Mathoshree auditorium was attended by Mukesh Ambani’s wife Nita, mother Kokilaben and children Akash, Isha and Anant, many who took the mic during the shareholder’s question session that followed the chairman’s address waxed eloquent on “Papaji (Dhirubhai Ambani)”, “Mataji (Kokilaben)”, “Ghar ki Lakshmi, Nitaji” and the “prince (Akash) and princess (Isha)”. Many other shareholders recalled anecdotes, recited poetry in Gujarati, Tamil and Hindi and shared congratulations for the twins’ impending nuptials.
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If Reliance AGMs looked like rock concerts during Dhirubhai’s times when they were held in stadiums, these days they look like big fat Indian weddings centred around the Ambani family where shareholders feel warm family vibes. Along with the company, Reliance AGMs too have come of age. Now they are telecast live so that not only the shareholders but even general public can watch India’s most awaited corporate spectacle.