April 30, 1982 was the day when a man named Dhirajlal Hirachand Ambani suddenly came into limelight. Earlier only a few knew him as Dhirubhai. Now he was India’s miracle man, Dhirubhai Ambani. When he woke up in the morning he had no idea what was coming to him on that day. With the mercury touching 330C Bombay Stock Exchange was to be clobbered by Bears. For the past six weeks a syndicate had been targetting Reliance shares. It was causing him a great worry. But dealing with this adversity would give him the idea of a giant Reliance group of the future. The success would give him the confidence and a high position where he would be out of the reach of the market manipulators.
Then every third Friday used to be the settlement day for the transactions of the ended fortnight. April 30 of 1982 was also a settlement day, a day of great upheavel in BSE history.
For this denoument stage had been set on 18th March when selling rocked BSE. At 1.35 p.m. the selling tide began and within 25 minutes share values of blue chip companies like Tisco and Century Textiles too could not withstand the tide. Its shares fell from Rs. 131 to 125. On that day 3,50,000 Reliance shares had been sold. A syndicate of Caltutta Bears was scripting the drama by resorting to short selling. Through short selling the syndicate of Bears had sold 11 lac Reliance shares worth Rs. 16 crores plus. The Bears planned to buy back those shares when the share prices would have fallen to lowest possible. Dhirubhai had smelled the rat and prepared to outwit the Bears. On 18th march as selling offer was made, the brokers of Dhirubhai bought every single share on offer. Reliance shares had fallen to 125. For two more days the same selling-buying drama went on. As according to BSE rules the company management could not buy its own shares, a new firm called Friends of Reliance Association came up. It bought 8,57,000 shares out of the 11 lac shares offered by the Bears. The Reliance share value kept climbing instead of falling. Dhirubhai had taught a lesson to Bears who were manipulating the share prices. The tables had been turned. He knew the financial status of his company and the fact that Bears had no Reliance shares. He demanded the physical delivery of the shares.
The Bears must meet the demand. So, they began to hunt for Reliance shares. But few wanted to sell. They asked for extra time to make up for the shortage of shares. But the brokers of the Reliance refused to give time without payment of Rs. 50 per share charge. Due to this stalemate B.S.E. remained closed for three days. The hunt for the Reliance shares by the Bears all over the country was pushing up Reliance Share prices. This game ended only on 10th May when the gap between the sold shares and availability closed up. Out of this crisis Dhirubhai emerged as a legend, a messiah for his share holders. Reliance share prices had already sky rocketed. He became a ‘cult figure’ for standing up for the protection of the interest of his share holders. He was the first industrialist to do so. No one else had ever cared for the interests of share holders. Dhirubhai fought that battle because he understood his responsibility towards his share holders who had trusted him with their small savings. No one of them owned more than 100 shares. Even a small loss could have broken them.
In answer to a question once he said—”A person should be ambitious and he must have the capacity to understand the thinking and feelings of other human beings.”
He knew why small investors needed to be protected. Dhirubhai had learnt lessons from his experience. He understood what it was like to be poor. When he needed money to set up his factories the banks had given him thumbs down sign. Before his arrival on the scene the only thing the companies cared for was to make profits and declare dividends.
Dhirubhai had set a new tradition according to which it was the duty of the company to protect the interest of its share holders. He knew that only paltry dividend cheques could not make an invester any richer. He set an example by his action and shown his commitment to his share holders. For this very reason today the family of shareholders of Reliance has so expanded that the group has to hire huge stadiums to accommodate them for annual meetings. When the postal department expressed its inability to deliver that huge number of letters, share certificate and annual reports, the Reliance officials would go to other cities to post mails from there. Dhirubhai once said—“I never get into frenzy to make money for myself. But I must earn money for my shareholders.”
