It’s been a good year for Asia’s richest man, Mukesh Ambani.
The Indian tycoon added almost $17 billion to his wealth as of Dec. 23, the most in Asia, taking his net worth to about $61 billion, according to the Bloomberg Billionaires Index. In comparison, Alibaba Group founder Jack Ma’s net worth grew $11.3 billion, while Jeff Bezos lost $13.2 billion.
The surge in Ambani’s fortune this year was fueled by a 40% jump in the shares of his Reliance Industries Ltd., a conglomerate that’s pivoting more toward consumer offerings than its core oil refining and petrochemicals businesses. The rally in the stock is more than double the gains for
India’s benchmark S&P BSE Sensex index during the period.
Investors are piling money on Reliance, betting newer businesses such as telecommunications and retail could soon unlock value. With a goal of building a local e-commerce giant to challenge the likes of Amazon.com Inc. in India, Ambani has spent almost $50 billion — mostly debt — on a
wireless carrier that’s become India’s No. 1 within three years of debut.
“Mukesh Ambani changed the narrative for Reliance Industries” as a leader not just in oil and gas but also in telecom and retail, and possibly soon in e-commerce as well, said Chakri Lokapriya, chief investment officer at TCG Asset Management, which oversees $3 billion in assets in
Mumbai.
“He successfully identified, invested and executed rapidly to create this new narrative,” Lokapriya said. “We believe this can potentially double shareholder value over the next four years.”
The newer businesses are likely to contribute 50% of Reliance’s earnings in a few years, from about 32% now, Ambani said in August. A representative for Reliance didn’t reply to an email seeking comment on Ambani’s wealth.
Zero Net Debt
While the success of the phone operator was a cause for cheer, the business mogul’s plans to pare Reliance’s debt has sent Reliance’s stock soaring to a record.
Ambani, 62, has vowed to slash the group’s net debt to zero by early 2021. Plans include a stake sale in Reliance’s oil-to-chemicals business to Saudi Arabian Oil Co., listings of the telecommunications and retail units within five years, sale of tower assets and strategic partners for a digital
platform linked to Reliance Jio Infocomm Ltd., the phone company.
