The Major Reasons Behind the Downfall of Anil Ambani

By Admin - July 14, 2022
Downfall of Anil Ambani

From the height of becoming India’s richest man to having many of his assets being seized by banks, Anil Ambani has seen his fair share of ups and downs over the years. Yet, despite all the adversity he’s faced, Ambani continues to remain one of India’s most prominent industrialists, with an estimated net worth of $1 billion in 2018. The major reasons behind the downfall of Anil Ambani and how he rose back to the top will be discussed in detail in this article.

i) Merger and acquisition

In 2006, Reliance Communications and Reliance Infocomm merged, making it the largest merger in Indian corporate history. The move was seen as a way to reduce debt and duplication of resources between the two companies. However, this large-scale merger proved to be a disastrous move for Anil Ambani. The merged company quickly ran into debt and by 2012 had amassed over $7 billion in debt. In order to try and reduce this debt, Reliance Communications sold off some of its assets, including its mobile towers and real estate. However, these asset sales only served to further cripple the company financially. As a result of all these factors, Anil Ambani was forced to step down as chairman of Reliance Communications in 2016.

ii) Tragedy at Sea

On June 15, 2009, oil rig Deepwater Horizon, owned by Transocean and operated by BP, exploded in the Gulf of Mexico. The resulting oil spill was one of the worst environmental disasters in history.
Anil Ambani was born on December 4, 1966, in Mumbai, India. He is the chairman and managing director (CMD) of Reliance Industries Limited (RIL), a Fortune 500 company and India’s second-most valuable company by market value.
In February 2006, Ambani’s younger brother Mukesh gifted him with shares worth $5 billion in Reliance Industries. This made Anil Ambani the world’s richest man at that time.
However, on October 24, 2008, the global economic crisis hit India hard.

iii) Reliance Communication

Reliance Communication, once a leading Indian telecom company, is now on the verge of bankruptcy. The company has been struggling for years, and its downfall can be attributed to a number of factors. First and foremost, Reliance Communication was heavily reliant on debt. This made it vulnerable to changes in interest rates and other economic conditions. Additionally, the company made a number of poor strategic decisions, such as investing heavily in CDMA technology just as 4G was becoming popular. Finally, Reliance Communication was simply unable to keep up with its larger and more efficient competitors. As a result, it is now facing bankruptcy proceedings.

iv) Reliance Defence

Anil Ambani, the Chairman of Reliance Defence, is one of the most high-profile businessmen in India. He is also one of the richest men in the country. However, in recent years, his business empire has been crumbling. One of the major reasons behind this is his reliance on defence contracts from the Indian government.

v) Network Reorganization

One of the major reasons behind the downfall of Anil Ambani was his network reorganization. This involved breaking up his old business empire, Reliance Industries, into several new companies. The problem was that this created a lot of debt and left Ambani with less control over his businesses. Additionally, it led to a power struggle within the family, which further damaged the business.

Sophie James

Hello, my name is Polly! Travel is a daily updated blog about travel, Adventure Travel, Air Travel, Places, Vacation and everyday moments from all over the world.

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