Too much money, or too little, is bad for everyone, including family businesses. When business is doing poorly, family members stick together, hoping for better days. When things are on an upswing and cash is pouring in, members are sorely tempted to strike out on their own, while the going is good.
With a long decade of prosperity behind it, it is splitting season in Indian Inc. Family after family is breaking up, some amicably, some noisily, while the rainbow lasts. I am personally of the opinion that there is nothing wrong in it, for businessmen are businessmen, and they will always do what they think is good for them. In an expanding environment, there is enough for everybody, and you cannot stop anybody from trying his or her luck.
After the brotherly tussle in Reliance, there are rumblings of disputes in the Piramal household, though this has been denied. Piramal is a relatively small group, though much in the public eye, because of the proclivities of some of its family members for Page 3 delights. It is not yet a billion-dollar group, which is when things usually come to the boil.
About 20 years ago, around the time I met Dhirubhai Ambani, I also came across one of the Piramal brothers, Dilip Piramal, who was at the time managing the VIP luggage business, quite a craze in those days. His brother, Ajay Primal, was nowhere in the picture then, but he seems to have stolen a march on his VIP sibling, with forays on pharma, real estate and retail stores. The VIP factory in Nashik is actually laying off people, though there is great demand for that type of luggage.
When I first met Dhirubhai in his office in Nariman Point, his company had just started work on the Patalganga petrochemical plant, and both the Hazira plant and the Jamnagar oil refinery were in distant future. Mukesh and Anil had just joined the company and both were present during our first meeting. The Reliance business was at the time worth about Rs 250 crore, may be a little more, but Dhirubhai was already talking about overtaking Tata Steel, then the biggest private sector company in India.
Which, of course, he did, and eventually left Tata Steel and the entire Tata group far behind, which must have taken everybody by surprise. They were the largest business house at the time and when they were told that a man called Dhirubhai Ambani was planning to overtake them, they just laughed.
Bur not for long. Reliance business is now about twice the size of Tatas, and Reliance Industries five times that of Tata Steel. But Tatas are still in one piece, while there are rumblings in the Reliane empire, less than three years after Dhirubhai's death.
There is, I think a fundamental difference between Tatas and Ambanis. Tatas are entrepreneurial is a mild sort of way, as if profit was their secondary concern. Their companies are highly profitable, but one views them almost as public sector concerns, like ordance factories.
It is different with the Ambanis. They are businesses in the American mould, with target and benchmarks, and the usual business school abracadabra. They are there to make money and stay ahead of everybody else in the corporate pack. Mukesh and Anil are schooled in this tradition and are naturally keen to emulate their great father, even if they have to part company with each other and strike on their own. Can you really blame them?
This article was originally published on January 20, 2005.
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