This Is The REAL Source Of Ambani’s Unlimited Wealth

Summary

Mukesh Ambani's immense wealth originates from Reliance Industries, particularly the Jamnagar Refinery, the world's largest and most profitable. Despite diversifying into telecom and retail, the refinery's oil-to-chemical business remains the primary cash cow, generating significant revenue and profits. Ambani's strategic foresight and dominance in industries ensure sustained wealth, even as he plans for future sectors like green energy.

Takeaways

• 🤑 Mukesh Ambani is the richest man in India, primarily due to his company, Reliance Industries, which has the highest revenue and market capitalization in the country.
• 🏭 Reliance Industries is not primarily driven by telecom or retail, contrary to popular belief. The real source of its wealth is the Jamnagar Refinery, the largest and most profitable refinery in the world.
• 💼 The refinery business was the foundation that provided the capital for Mukesh Ambani to expand into other sectors like telecom and retail.
• 🚀 Reliance Jio, despite being a significant part of the company, was not profitable for the first two years and required a massive initial investment.
• 💡 The Jamnagar Refinery is a technological marvel, capable of processing over 170 different types of crude oil with minimal waste generation.
• 💰 In 2023, Reliance Industries had a total profit after tax of over 73,000 crore rupees, with the oil-to-chemicals refining business contributing the largest share at 41.5%.
• 🛠️ The Jamnagar Refinery was built in just three years with a total investment of Rs. 25,000 crores, showcasing the Ambani's business acumen and efficiency.
• 🌳 The refinery is a fully integrated manufacturing facility with its own residential housing, power generation, shipping port, water treatment plant, and even an airport terminal.
• 🔋 Mukesh Ambani is planning for the future, converting the Jamnagar refinery from a fuel producer to a chemical producer, and investing in green energy projects.
• 👨‍👧‍👦 The Ambani family's business strategy involves complete domination of industries, leading to a monopolistic position that eliminates competition.

Q & A

Why is Mukesh Ambani considered the richest man in India?

Mukesh Ambani is considered the richest man in India due to his wealth being tied to his company, Reliance Industries, which is the company with the highest revenue and market capitalization in India and the second most profitable company, only behind SBI.

What is the primary source of Mukesh Ambani's wealth?

The primary source of Mukesh Ambani's wealth is the Jamnagar Refinery, which is the largest and most profitable refinery in the world, generating a significant portion of Reliance Industries' revenue.

Why was Reliance Jio not the initial major contributor to Reliance Industries' profits?

Reliance Jio was not the initial major contributor to Reliance Industries' profits because it was launched in 2016 and did not generate any profit for the next two years, requiring an initial investment of $22 billion with no return for that period.

What is the significance of the Jamnagar Refinery in terms of size and technology?

The Jamnagar Refinery is significant because it is the largest refinery in the world with superior technology that no other country or company can match, allowing it to process more than 170 different types of crude oil with high efficiency and low waste generation.

How did Dhirubhai Ambani initially establish the Reliance brand?

Dhirubhai Ambani initially established the Reliance brand by starting as a small-time trader of textile yarns in the late 1960s and later launching the 'Vimal' clothing brand in 1975, which became popular for its high-quality fabric.

What business strategy did Dhirubhai Ambani employ to improve profit margins?

Dhirubhai Ambani employed the strategy of backward integration, where he started manufacturing polyester yarn himself to improve profit margins by not sharing profits with yarn suppliers.

What was the vision behind the creation of the Jamnagar Refinery?

The vision behind the creation of the Jamnagar Refinery was to own the entire process from crude oil refining to petrochemical production, ensuring complete control over the supply chain and maximizing profit margins.

How did Mukesh Ambani execute the Jamnagar Refinery project?

Mukesh Ambani executed the Jamnagar Refinery project by overseeing its construction on a massive scale, incorporating advanced technology, and completing it in record time with an investment of Rs. 25,000 crores or $6 billion dollars.

What is the Jamnagar Refinery's current status in terms of profitability and efficiency?

The Jamnagar Refinery is currently the most profitable refinery in the world, with a high complexity index, low waste generation, and consistently ranked number one for low operation and manpower costs.

How is Mukesh Ambani planning for the future of the Jamnagar Refinery?

Mukesh Ambani is planning for the future of the Jamnagar Refinery by investing in the transition from a leading producer of fuels to a leading producer of chemicals and petrochemicals, as well as investing in green energy projects to produce solar cells, batteries, and green hydrogen.

Outlines

00:00

💰 The Wealth of Mukesh Ambani: Beyond Jio and Retail

This paragraph delves into the source of Mukesh Ambani's immense wealth, which is primarily attributed to Reliance Industries, India's most revenue-generating and second most profitable company. Contrary to popular belief, the paragraph clarifies that neither Reliance Jio, the telecom giant, nor Reliance Retail contributes the majority of profits. Instead, the focus shifts to the Jamnagar Refinery, the world's largest, which is the true cash cow for the Ambani family. The refinery's superior technology and high revenue generation are highlighted, as is the refinery's establishment and its role in Mukesh Ambani's journey to becoming India's richest man.

05:01

🏭 The Jamnagar Refinery: A Legacy of Domination and Integration

The second paragraph traces the origins of the Ambani's entry into the oil refining business, starting with Dhirubhai Ambani's initial ventures in textiles and backward integration into polyester yarn manufacturing. It details the strategic expansion into petrochemicals and the establishment of the Hazira plant, leading to the vision of the Jamnagar refinery. The paragraph emphasizes the refinery's scale, technological superiority, and its role as a cash cow, generating significant revenue and profits. It also discusses Mukesh Ambani's business philosophy of dominating industries and the refinery's transformation plans in response to the rise of EVs and green energy.

10:02

🛠️ Future-Proofing the Ambani Empire: From Oil to Petrochemicals

The final paragraph outlines Mukesh Ambani's foresight and strategic planning for the future of the Jamnagar refinery amidst the global shift towards green energy. It discusses the refinery's transition from fuels to petrochemicals production and the significant investment in this transformation. The paragraph also touches on Reliance's foray into green energy with a multi-billion-dollar project for solar cells, batteries, and green hydrogen production. The narrative concludes with a reflection on Ambani's enduring wealth and the potential challenges of family succession, hinting at a future video on the topic.

Keywords

💡Mukesh Ambani

Mukesh Ambani is the richest man in India and the central figure in the video script, which delves into the sources of his wealth. He is the chairman and largest shareholder of Reliance Industries, a conglomerate with interests in various sectors. The video discusses how his wealth is primarily derived from the company's operations, particularly its oil refining business.

💡Reliance Industries

Reliance Industries is a key concept in the video, being the most valuable company in India by revenue and market capitalization. It is also the second most profitable company in the country. The script explains how various business segments within Reliance Industries contribute to its overall profitability, with a focus on the oil refining business.

💡Revenue

Revenue refers to the total income generated by a company from its business operations. In the context of the video, the script highlights that Reliance Industries has the highest revenue among Indian companies, which is a significant factor in Mukesh Ambani's wealth.

💡Market Capitalization

Market capitalization is the total market value of a company's outstanding shares of stock. The video mentions that Reliance Industries has the highest market capitalization in India, indicating its financial strength and investor confidence.

💡Profit

Profit is the money retained by a company after deducting all its expenses from its total income. The script discusses the profitability of Reliance Industries, particularly in comparison to other companies like SBI, and how different business segments contribute to this profit.

💡Reliance Jio

Reliance Jio is a telecommunications company and a significant part of Reliance Industries. The video script clarifies misconceptions about its role in Ambani's wealth, noting that it was not the initial source of profits for the company but has become a major contributor over time.

💡Reliance Retail

Reliance Retail is the retail arm of Reliance Industries, which includes various retail formats. The script mentions it as one of the business segments contributing to the company's profits, although it is not the primary source of Mukesh Ambani's wealth.

💡Jamnagar Refinery

The Jamnagar Refinery is a crucial concept in the video, as it is identified as the largest and most profitable oil refinery in the world. The script explains how this refinery, owned by Reliance Industries, is the primary source of Mukesh Ambani's wealth, with its superior technology and high revenue generation.

💡Oil-to-Chemicals (O2C)

Oil-to-Chemicals refers to the process of converting crude oil into chemical products. The video script emphasizes that the O2C segment of Reliance Industries is the largest contributor to the company's profits, highlighting the refinery business's importance.

💡Backward Integration

Backward integration is a business strategy where a company starts to produce its own raw materials to increase profit margins. The script describes how Dhirubhai Ambani, Mukesh's father, used this strategy in the textile industry and later in petrochemicals, leading to the establishment of the Jamnagar Refinery.

💡Complexity Index (CI)

The Complexity Index is a measure of a refinery's ability to process various qualities of crude oil into high-value products. The video script points out that the Jamnagar Refinery has the highest CI in the world, indicating its advanced capabilities and efficiency.

💡Monopolization

Monopolization refers to the domination of an entire market by a single entity, often to the point where competition is eliminated. The script discusses Mukesh Ambani's business strategy of achieving monopolization in various sectors, such as telecom and retail, to secure his wealth and company's dominance.

Highlights

Mukesh Ambani is the richest man in India, with his wealth primarily tied to Reliance Industries.

Reliance Industries is India's highest revenue and market capitalization company, and the second most profitable company.

Contrary to popular belief, Reliance's telecom business and retail sector are not the main contributors to their profits.

Reliance Jio, despite being the largest telecom operator in India, did not generate profit for the first two years after its launch in 2016.

The Jamnagar Refinery is the real source of Ambani's wealth, being the largest and most profitable refinery in the world.

The Jamnagar Refinery generates a revenue of 68 crore rupees per hour.

Dhirubhai Ambani laid the foundation for Reliance, starting as a textile trader and later venturing into polyester yarn manufacturing.

Dhirubhai Ambani's vision led to the creation of the Jamnagar refinery, executed by his son Mukesh Ambani.

The Jamnagar refinery is a technological marvel, capable of processing over 170 different types of crude oil with minimal waste.

Reliance Industries' profits in 2023 were over 73,000 crore rupees, with the Oil To Chemicals (O2C) refining business contributing the most.

Mukesh Ambani's strategy involves dominating industries to the point of monopolization, making competition nearly impossible.

The Jamnagar refinery is transitioning from producing fuels to chemicals, anticipating the decline of petrol and diesel due to the rise of EVs and green energy.

Reliance has plans to invest Rs. 75,000 crores over 5 years to boost its petrochemical output and is also investing in green energy projects.

Mukesh Ambani's foresight and business acumen have been consistent, planning and executing strategies that ensure wealth and dominance in various sectors.

The Ambani family's succession plan is a significant aspect of their business strategy, potentially creating the next generation of billionaires.

Transcripts

You know that Mukesh Ambani is the richest

man in India. But do you know

why exactly is he so rich?

Where does he get all this money from?

You probably know that his wealth is tied to his

company Reliance Industries,  but how big is this company?

Reliance Industries is the company with the

highest revenue and market capitalization of any

company in India, and it is the second most

profitable company in India, only behind SBI.

Do you know how exactly all of this money and

profit is generated?

Many people think that it is because of Reliance

Jio - the largest telecom  operator in India that is

also owned by Mukesh Ambani,

While others think that it is because of Reliance

Retail and its Smart Bazaar outlets.

But all of them are wrong - Reliance's telecom

business is not the majority  contributor to their total profits,

And Reliance Retail is even smaller.

In fact, Reliance Jio was launched in 2016, and it

did not generate any profit for the next 2 years.

And before launching, it required an investment

of $22 billion dollars -

An investment of 1,50,000 crore  rupees with no return for 2 years.

Where did Mukesh Ambani get all this money from?

Well the source is an unlimited pit of money - a

pit of money so deep that you could not spend

all of it even if you spent your entire lifetime.

It is a cash cow that the Ambanis established

decades ago - which he, his children, and

probably the next several generations to come

will continue to milk.

And it is not in sectors like entertainment or

sports or retail - It is one of the most boring

businesses that you could ever work in,

And that ultimate source of Ambani’s wealth is the Jamnagar Refinery.

It is a crude oil refinery  that turns crude oil into

petrol that you can use, along  with several other products.

But it is not any crude oil refinery - it is the

largest refinery in the world,

With technology so superior that no other

country or company can match it.

And the oil-to-chemical segment of Reliance

Industries generates a revenue  of 68 crore rupees per hour.

So when was this refinery  established and who built it?

How did an Indian manage to build the biggest

crude oil refinery in the world?

Why exactly did the Ambanis get into the refinery

business in the first place?

In this video, you are going to find the answer to

these questions and understand what is the

REAL source of Ambani’s wealth.

We will deep dive into the psychology of Mukesh

Ambani and find out how he managed to

become the richest man in the country.

So let’s begin by understanding what exactly is a

crude oil refinery. See, any of the petroleum

products that we use like petrol or diesel are not

extracted from Earth ready-to-be-used.

What we get from extraction is crude  oil - which needs to be refined.

A crude oil refinery like the one in Jamnagar

takes this crude oil, refines it, and  generates the final usable products.

So crude oil is used to extract products like

Petrol, Diesel, Jet Fuel, LPG, Kerosene,

Petrochemicals, and even Petroleum Jellies like

Vaseline.

And the Jamnagar refinery is the biggest oil

refinery in the world.

Not only does it hold the record for being the

biggest refinery in the world  for a quarter of a century,

But it is also the most  profitable refinery in the world.

And thanks to its sheer size and scale, it is the

biggest source of Mukesh Ambani’s wealth today.

In 2023, Reliance Industries had a total Profit

after Tax of over 73,000 crore rupees.

If you look at the EBITDA contribution,

Oil and Gas exploration had a contribution of

9.1% - this segment basically means finding and

extracting the crude oil  which can later be refined.

Reliance Retail contributed 12% - this segment

includes Reliance Fresh, Smart Bazaar, Ajio,

Netmeds, and others.

And Digital Services contributed to 33.6% - this

includes Jio Telecom, JioCinema, Jio Fiber, and

basically everything Jio except JioMart.

The largest contribution was actually made by

O2C or the Oil To Chemicals Refining Business -

which contributed 41.5%.

You also have to understand here that Digital

Services and Reliance Retail were recent bets

made by Mukesh Amabani -

They have started paying off in the form of

profits only a few years ago -

The Refinery business was what gave him the

capital money to play all these bets.

A great example of this was the 22 billion dollars

needed to establish Jio Telecom in 2016 -

If Mukesh Ambani did not have the money from

the refinery business coming in back then,

How do you think would he have been able to

finance the expansion to all these sectors?

But why did the Ambanis get into this oil refining

business in the first place?

You see unlike Gautam Adani, Mukesh Ambani

and Anil Ambani are not  first-generation billionaires -

The foundation for Reliance was actually  laid by the OG - Dhirubhai Ambani.

Dhirubhai initially started as a small-time trader

of textile yarns in the late 1960s,

And in 1975, he launched “Vimal” - a clothing

brand that quickly became popular  for its high-quality fabric.

But Dhirubhai was not satisfied - he found that a

chunk of profit was actually going to their

suppliers who provided them the yarn for clothes,

And he did not want to share.

So he started manufacturing polyester yarn.

Although he had no formal business education,

what he was doing was backward integration -

Where you manufacture the raw materials

yourself to improve your profit margins.

By the late 1980s, he had already become the

richest man in India.

But then, he found that manufacturing polyester

yarn needed polymers and petrochemicals,

So in 1996, Reliance commissioned its

integrated petrochemical complex in Hazira, Gujarat -

This turned them into one of the biggest

petrochemical players in India at that time.

But he was still not satisfied -

Petrochemicals are obtained by refining crude

oil, and he wanted to own that  part of the process as well.

So in 1999 - Dhirubhai Ambani envisioned the

creation of the largest  oil refinery in the world -

the Jamnagar refinery.

And the execution was conducted by the elder

son of Dhirubhai - Mukesh Ambani.

Now why it was Mukesh and not Anil is a story of

its own which I will uncover in the next video,

But the fact remains that it was Mukesh Ambani

who undertook the execution of this mega project.

And this was where the incredible foresight and

business acumen of Ambanis came into play.

You see, the Ambani philosophy of doing

business has really never changed.

When Dhirubhai Ambani did textiles, he ensured

that he dominated - Vimal was the  largest textile brand at its peak.

Then the same happened with petrochemicals -

the Hazira plant was one of the most

sophisticated ones of its time.

And Mukesh Ambani has continued that pattern -

He literally eliminated all competition from the

market with Jio in the telecom sector,

Did the same thing in the retail sector with the

forced acquisition of Big Bazaar,

And recently did it again by the virtually forced

merger with Disney Hotstar in India.

He makes a company so big that it becomes

impossible for anyone else to even survive, let

alone compete with him.

And he did the same thing with  the Jamnagar Refinery as well -

It was envisioned as the absolute leader in the

industry right from the beginning.

It was not just an ordinary  refining plant - it was a

fully integrated manufacturing facility,

With its own residential  housing for 2500 employees,

Its own electricity power generation complex,

A dedicated shipping port,

It’s own water treatment plant,

And even its own airport terminal.

It is built on an area of over  7500 acres or 30 square kilometers.

The much-publicized pre-wedding celebration of

Anant Ambani in March 2024 was hosted in the

Jamnagar complex itself -

That is how enormous and sufficient it is.

The total investment to build this enormous

refinery was Rs. 25,000  crores or $6 billion dollars.

And it was built in just 3 years at just about 50%

of the typical costs of other similar refineries -

More than 75,000 workers worked round the

clock for months to complete it in record time.

But even after being built so quickly,

The Jamnagar refinery is a technological marvel.

The Complexity Index or CI of a refining plant

indicates its ability to  process different qualities

of crude oil into high-value products -

The higher the index, the  more advanced a refinery is.

And the Jamnagar Refinery has the  highest CI in the world at 21.1 -

The next best is Motiva  Refinery in the USA at 14.3,

And almost all other major  refineries have a CI of around 11.

So while other refineries can only process crude

oil above a certain level of purity,

The Jamnagar refinery can take on garbage

crude oil and process it easily -

It is able to process more than 170 different

types of crude oil without any difficulties.

While typical refineries have  a waste generation of 5%,

The Jamnagar refinery waste  generation is just about 0.2%.

It is consistently ranked number one for low

operation and manpower costs in the world.

And by sailing such a tight ship, the Jamnagar

refinery profits are higher than  any other refinery in the world.

So because of its gigantic scale, low cost,

high-tech abilities to process any  type of oil and high profit margins,

It is the ultimate cash cow for Mukesh Ambani.

In 2023, the oil refining business  generated a revenue of 5,95,000 crores -

That is 1600 crores per day, or  68 crore rupees every single hour.

Since you started watching this video, Mukesh

Ambani generated over 10 crore  rupees from this business.

Let that sink in for a moment.

But as I said, the true magnificence of Ambani’s

business acumen lies in his foresight -

Right now, he is still planning  10 years into the future.

With the rise of EVs and green energy, he knows

that petrol and diesel are going to become

obsolete in the coming years.

So he is now investing in those sectors -

Reliance has already started converting the

Jamnagar refinery from a leading producer of

fuels to a leading producer of chemicals.

The goal is to convert more than 70% of crude

oil refined in Jamnagar into petrochemicals.

When this oil-to-chemical transition is complete,

the Jamnagar refinery will produce  only jet fuel and petrochemicals.

It has already announced plans to invest Rs.

75,000 crores or 9.4 billion dollars over 5 years

to boost its petrochemical output.

In 2021, it also announced another $10 billion

green energy project to build 4 gigafactories in

Jamnagar, which will produce solar cells,

batteries, and green hydrogen.

So even today, this man is thinking 10, 20, 30

years into the future and  what will be relevant then.

And this is exactly why Mukesh Ambani was rich

25 years ago, he is rich today, and he will likely

be rich 25 years from now.

The strategy being adopted today is the same

that was adopted 25 years ago -

Complete and utter domination of an industry

that results in a monopolization,

So competition cannot even exist.

The only thing that led to the downfall of the

Reliance empire about 25 years ago was the

feud between the two Ambani brothers after their

father passed away,

And now, potentially another family feud could

be in the making with three Ambani heirs in line

for succession.

But Mukesh Ambani is doing everything in his

capability to avoid that feud,

With a mega-succession plan that could birth the

next potential billionaires of India.

I will bring out a video  soon detailing the planned

succession of the Mukesh Ambani empire,

So make sure you don’t miss  it by subscribing here.

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Until I see you in the next video, goodbye!