Worlds Richest Man Now - Mukesh Ambani
Capital Markets October 29th, 2007
As the Sensex crossed 20,000 today,..Mukesh Ambani’s market value of his wealth rose to $63.2 B. he has surpassed Bill Gates, Carlos Slim helu and Warren Buffet. This has been achieved despite the split with his brother Anil Ambani. With India growing substantially in the next decade his wealth is going to only increase.
PTI news in Times of India reports
Following a strong share price rally on in his three group company, India’s most valued firm Reliance Industries, Reliance Petroleum and Reliance Industrial Infrastructure Ltd, the net worth of Mukesh Ambani rose to $63.2 billion (Rs 2,49,108 crore).
In comparison, the net worth of both Gates and Slim is estimated to be slightly lower at around $62.29 billion each, with Slim leading among the two by a narrow margin.
Warren Buffett, earlier the third richest in the world, also dropped one position with a net worth of about $56 billion.
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Ambani’s wealth of about Rs 2,49,000 crore includes about Rs 2,10,000 crore from RIL (50.98 per cent stake), Rs 37,500 crore from RPL (37.5 per cent) and Rs 2,100 crore from RIIL (46.23 per cent).
Economies 2.0
A few years ago - about 1997/98 - there was a similar situation about Azim Premji and he was listed as the richest man according to SENSEX and the Rupee to Dollar conversion formulas - Straight Forward!
So I checked the international media - mainly Forbes. He was nowhere to be seen amongst the top.
This time, it is Mukesh Ambani. I checked Forbes again. Ambani is at number 14 on Forbes today. It is a subjective issue where you correlate the voloatility, market capitalisation and all the other factors to determine the net worth of someone in that league. Within a certain frame of reference it makes sense. But change the frame of reference and things appear different. The question is, which frame of reference?
Let us take an example. I buy a dozen Coke cans from a supermarket for say $12 or $1 each. At the same time, a millionaire goes to a desert in Africa and gets thirsty. He comes across a local man with only 1 Coke can. Understanding the millionaire’s desperation and his own greed, he demands $1000 for the can and the millionaire pays it. In that frame of reference, that can was worth $1000. But that doesn’t make my collection of a dozen coke cans worth $12,000. It still is only $12.
So my question is, if Mukesh Ambani is really at no 1, why doesn’t Forbes see it, as you see it?
Sachin,
Your observation is correct.Forbes ranking is based on data as on August. Also the recent bull run in Sensex has raised Mukesh’s wealth. If you calculate based on his direct and indirect holdings he must be sitting way above Bill Gates. You also have to give it to him that the way infrastructure, retail, energy growth is happening and is going to happen in India for the next 10 years,..Mukesh is in a good spot to top 100B in wealth for sure as most of his companies operate in that space.
Stock market may be volatile but his growth is surely a function of how well his companies do. Looking at Reliance track record, its a no brainer.
Surely you will see it in Forbes too in the near future.
sachin,
the forbes list you are referring to is dated 8th march 2007,.. Since then the Sensex has risen from 13k to 20K
that speaks for his position..
there is a timestamp to everything
cheers
samba
Hi Sachin,
Even though your point is valid, that Market Cap as a valuation tools, the value keeps on fluctuating based on market demand and supply and their respective pricing mechanism.
Your coke example may not be apt in this context, the MarketCap assumes that there are many other buyers and sellers to buy the products valued in similar market and hence the entire methodology is based on market realisation.
I agree with your observation that, if Mukesh wants to sell the entire holding he may not get the price quoted in the market.It would be lower.
Cheers
Sriram
Sriram,
First of all, whether Bill Gates or Mukesh Ambani, none is better than the other. In that league, they both are Kings any way. They both are playing their own games, and both are good at it.
I get that by normal conversion of Rupee to Dollar, Mukesh is the richest. For me personally, it doesn’t make a difference. But what makes the discussion interesting for me is it’s basically a news item as to who is the richest. I googled Mukesh Ambani, Richest Man with a few different combinations; and I only get Indian media making it big news. The other global network covering the news was CNBC. But CNBC do not rate Mukesh Ambani as the richest themselves. They only mention Indian media rating. Check this link:
http://www.cnbc.com/id/21532719/site/14081545
My argument here is, Indian markets do not seem to have the credibility in the global sense. And that’s my personal opinion, not the truth. And in that sense, I get the sense of my Coke example when it comes to Indian markets. Indian markets seem a little isolated in the global perspective. In my perspective, the Indian economy is not having as huge an impact as we Inidans believe it does.
Like any other Indian, I am optimistic about India too. But I would have a different conversation with a non Indian from the one I am having here.
Your comments are welcome.
Sachin.
Sachin,
Neither you are interested nor I am interested in whether Mr Ambani or Bill Gates are richest.
I missed your point that CNBC has got a different sets of rich people.
Where I am coming from is the methodolgy adopted on market captialisation which is based on the principle that there many sets of buyers and sellers.
Sachin,
I don’t agree India not credible in the Global market. Today if I meet customers I don’t need to sell India to them but I have to do for other countries like Bucharest or Budapest. Most of my customers ask how much you can take it to India.
The reason is India is already sold from knowledge capital perspective. If you see India is the only country growing at 10% GBP while western european countries growth rate is negligible.
Soon you would see Larry King interviewing Mukesh because this is where the economy is heading towards north.
Your Coke example is more opportunity based.
Srini,
I completely agree on everything you said.
My point about Credibility was not about the economic growth of India. My point was about the credibility of the reports by Indian exchanges and Indian media - in this case, of Mukesh Ambani.
When I want to look for who’s the biggest in the world, I look at media that are considered renowned in the world. And I used standard names like Google, CNN, Forbes etc.
By themselves, none of them have rated Ambani at no 1. They have mentioned Indian media mentioning that. That is my point.
It’s no suprise for me that Larry King will Interview Mukesh Ambani. I don’t watch Larry King much. But I am sure there are better financial experts than Larry.
Cheers,
Sachin.
Sachin,
You don’t need to search for Ambani in Indian meadia but just go to http://www.forbes.com/2007/03/07/billionaires-worlds-richest_07billionaires_cz_lk_af_0308billie_land.html (Forbes.com )Mukesh is no 14 and Lakshmi Mittal is no 5.
Sachin,
You don’t need to search for Ambani in Indian meadia but just go to http://www.forbes.com/2007/03/07/billionaires-worlds-richest_07billionaires_cz_lk_af_0308billie_land.html (Forbes.com )Mukesh is no 14 and Lakshmi Mittal is no 5.
Srini
Dear Srini,
It is a known fact that forbes has listed Mukesh as No 14. But the point Sachin is trying to make is “HE” is not listed by Forbes or CNN or for that matter any US based Company as No 1.
They would not do it now, as it take a little more time to digest that an Indian has become no 1. In fact many Indian still do not want to believe this.
When a US or UK based company ranks him, then only we want to belive it……. It is really ridiculuos…. We still as Indian want to buy Phorin Cars, Shirts, VCRs etc… still want to know about ourself from “Others”.
Very Interesting…….