Mukesh Ambani's ambitious succession plan for Reliance Industries

Apart from working on big ideas that'll shape the future course of India's biggest company in terms of market capitalisation, Asia's richest man and Reliance Industries Ltd Chairman and Managing Director Mukesh Ambani is preparing a succession plan for his $208 billion empire that spans from oil refining to petrochemicals to telecom.

Most likely, after learning from a series of mistakes made by his own family and other richest families across Asia, Mukesh Ambani would like to take a leaf from the Walton family playbook on the transfer of wealth to ensure it does not bring in the old memories of civil war back in the Ambani family, news agency Bloomberg reported citing people familiar with the matter. As per the report, Sam Walton, the founder of the world's biggest retailer Walmart Inc, followed a simple succession model -- keep family central but delegate management control.

The 64-year-old Ambani, whose net worth is over $94 billion, has remained tight-lipped on succession so far. But it's evident from the current company workings that Mukesh Ambani is actively looking at charting a succession plan. As per the company filings, the Ambani family's current stake in Reliance Industries has risen to 50.6 per cent from 47.27 per cent in March 2019.

Preparing younger generation of Ambanis for future

Addressing the company's annual general meeting (AGM) in June 2021, Mukesh Ambani had indicated that his children will now find a prominent place in the family's vast empire. He had said: "I have no doubt whatsoever that the next generation of leaders at Reliance, led by Isha, Akash and Anant, will further enrich this precious legacy."

Mukesh Ambani is thinking much ahead of time and had started grooming his kids for future roles well in advance. His twin children Akash and Isha, are both active in the group's new-age businesses of retail and telecom. In 2014, both of them were appointed as directors on the boards of RIL's telecom and retail businesses.

Currently, his youngest son Anant Ambani serves as a director at Jio Platforms Ltd, which is a wholly-owned subsidiary of Reliance Industries. He's looking at the renewable energy and oil and chemical units of Reliance as a director.

Also read: What are the business responsibilities of Mukesh Ambani's children?

What Ambani's succession plan looks like

To ensure a smooth succession, Mukesh Ambani plans to shift the family's holdings into a trust-like structure, as reported by the news agency. The trust will fully control Reliance Industries, and the new entity could have all the family members, including wife Nita Ambani and his three children, twins Akash (30) and Isha (30), and Anant (26), on its board.

Also read: 15 main events in Ambani family's rise to the top

The Ambani family civil war

Mukesh Ambani's father Dhirajlal Hirachand Ambani, also known as Dhirubhai Ambani, had founded Reliance in 1973. He led the family business expansion from textile to oil but, soon after his sudden death in 2002, the family plunged into chaos. The differences between Mukesh and his brother Anil Ambani started growing as their business decisions clashed with each other.

This battle continued for three years before their mother Kokilaben interfered in 2005 and divided Reliance's assets. In the family business split, Mukesh Ambani got refining, petrochemicals, oil and gas and textile businesses, Anil Ambani was made in charge of telecommunications, asset-management, entertainment and power generation businesses.

Over years, while Mukesh Ambani was able to successfully transform Reliance into a behemoth that has interests in everything from crude refining to mobile communication, retailing and clean energy space. Playing on the global level, Ambani has challenged the likes of Amazon and Walmart, and has tied up with tech giants like Google and Facebook to redefine his company's position. Anil Ambani's business empire, however, crumbled due to a series of mistakes along the way.

Also read: An Empire Shaken

Walton family succession plan

The Walton family owns one of the biggest conglomerates in the world -- Walmart, founded by the American businessman Sam Walton, has now grown into the largest retailer in the world. Both his sons sit in the company board. While the world's richest family has been criticised for keeping the family's interests over shareholders, the Arkansas-based company believes it works as per the norms.

Sam had reportedly started preparing for the succession plan around 40 years before he died. He passed 80 per cent of the business to his four children -- Alice, Rob, Jim and John. As per the latest data, the Walton family owns about 47 per cent of Walmart.

Each week, around 220 million customers and members visit around 10,500 stores and clubs under 48 banners in 24 countries and e-commerce websites. With the fiscal year 2021 revenue of $559 billion, Walmart employs over 2.3 million associates worldwide.