Amid the attention surrounding Reliance Jio’s IPO, the story of the Reliance Group’s first public offering, launched 49 years ago, offers a glimpse into how the company attracted investors and generated substantial wealth over the decades.
Founded by industrialist Dhirubhai Ambani, the Reliance Group launched its first IPO in 1977, when the company was known as Reliance Textiles Industries.
Records show that the company raised ₹2.80 crore through its IPO between November 15 and 17, 1977. Reliance Textiles shares were subsequently listed on the Bombay Stock Exchange (BSE) and the Ahmedabad Stock Exchange on January 23, 1978.
According to a recent report by Fortune India, Reliance Textiles Industries issued 28.2 lakh shares at a price of ₹10 per share. The issue received applications for 7.19 times the number of shares offered and brought approximately 58,000 shareholders into the company.
On the first day of trading, the shares were quoted at ₹17 to ₹18 apiece, giving investors a gain of 70% to 80% on the listing day itself.
The offering was not a fresh issue of shares. Instead, Dhirubhai Ambani and his brother Natwarlal Ambani, who were the company’s promoters, sold part of their holdings. In 1985, Reliance Textiles Industries was renamed Reliance Industries.
According to the company’s 1976-77 annual report, 57,949 shareholders were registered following the IPO. Of these, 56,129 shareholders held up to 200 shares each, 1,647 held between 225 and 1,000 shares, and 125 held between 1,050 and 5,000 shares. Another 48 shareholders owned more than 5,000 shares each.
From an issue price of ₹10 per share, the stock rose to ₹17-₹18 when it was listed and reached ₹50 later that year. Two years later, it had climbed to ₹104, and within four years, it reached ₹186.
According to Fortune India, an investment of ₹1,000 in Reliance’s 1977 IPO would have bought 100 shares. Taking into account subsequent bonus shares and the appreciation in the share price, that investment would be worth approximately ₹50 lakh today. Any dividends distributed by the company over the years would be additional to that amount.
Uday Kotak Recalls Reliance’s Early Marketing Campaign
Recently, Uday Kotak, founder of Kotak Mahindra Bank, recalled Reliance Textiles’ IPO at a Jio event. He said, “In 1977, when I was 18 years old, Mumbai’s Chowpatty and Marine Drive were decorated for Reliance Textiles’ marketing campaign. It was a magical moment for me.”
Ajay Garg, director and chief executive officer of SMC Global Securities, wrote in a social media post that Reliance Textiles Industries’ IPO marked a turning point, as people from smaller towns began investing in the stock market for the first time.
In 1977, India’s middle class generally preferred investing in gold, land or fixed deposits with banks. The stock market largely remained the preserve of a small group of wealthy people in Mumbai and a handful of major brokers.
Dhirubhai Ambani sought to expand that investor base by sending agents to smaller towns across the country, including in Gujarat. His approach helped bring ordinary investors into the equity market at a time when stock market participation was limited.
Australian journalist and author Hamish McDonald documented the company’s early journey in his biography of Dhirubhai Ambani, titled “The Polyester Prince: The Rise of Dhirubhai Ambani”, published in 1998.
In a chapter titled “Guru of the Equity Cult”, McDonald discussed Reliance Textiles’ 1977 IPO and the company’s subsequent growth.
He wrote that Indira Gandhi’s second term as prime minister was a golden period for Dhirubhai Ambani. In terms of annual sales, his company was not even among India’s top 50 companies in 1979. By 1984, however, Reliance had become one of the country’s top five companies.
McDonald also observed that Dhirubhai had become so well known in India that his admirers regarded him not merely as a businessman but as they would a cricketer or film star.
The Corporate Restructuring Before the IPO
The book explains that Dhirubhai had expanded his business capabilities during the 1970s and was preparing to raise capital.
He had established a company called Mynylon Limited in Karnataka. In 1975, with the approval of the Karnataka and Bombay High Courts, Reliance and Mynylon were merged. Mynylon, which had paid-up capital of just ₹11,000, took over all the assets and liabilities of Reliance, whose assets were valued at ₹6 crore.
In March 1977, the company moved back from Bangalore, now Bengaluru, to Bombay, now Mumbai, and was renamed Reliance Textiles Industries.
In October-November 1977, Reliance launched its first IPO, selling shares from the holdings of Dhirubhai and his younger brother Nathubhai (Natwarlal). The company subsequently expanded its equity base through rights issues and bonus issues at regular intervals.
In September 1979, financial institutions converted 20% of their loans into equity.
According to McDonald’s book, India had fewer than one million shareholders in 1980. By 1985, that number had risen to four million, with Reliance alone accounting for more than one million shareholders. One in every four shareholders in India owned Reliance shares, the book states.
Dhirubhai had acquired the status of a hero, particularly in Gujarat.
The company’s rise is widely regarded as one of the factors that encouraged small investors to enter the stock market. Dhirubhai’s journey from a modest beginning to building a large business empire helped make equity investment more accessible to ordinary Indians.
From ₹14,000 to a Business Empire
According to the Reliance Group’s website, Dhirubhai had only ₹14,000 when he began his business journey. Over the following three and a half decades, Reliance grew to a size of ₹60,000 crore and became the first Indian private-sector company to enter the Fortune 500 list.
Before Reliance’s efforts helped increase public interest in equity investment, participation in India’s stock market was largely confined to a small, financially strong section of society.
Dhirubhai Ambani was born in 1932 in Chorwad village in Gujarat’s Junagadh district. According to his profile on the Reliance Group’s website, he travelled to Aden, in present-day Yemen, in 1949 at the age of 17 in search of employment.
There, he worked as a dispatch clerk for a company and was later entrusted with managing a petrol pump at the port of Aden.
In 1958, he returned to India with the ambition of starting his own business. He established Reliance Commercial Corporation to trade in spices.
In 1962, he identified an opportunity in the yarn business. In 1965, he changed the company’s name to Reliance Textiles Industries.
In 1966, he purchased land in Naroda, near Ahmedabad, and established a textile mill there. In 1975, a World Bank technical team certified the Naroda mill as the best composite textile mill in India.
Reliance Textiles’ IPO followed in 1977, setting the stage for the company’s subsequent expansion.
At the time, most people stayed away from the stock market and regarded it as a form of gambling. Dhirubhai’s decision to raise capital through an IPO rather than relying on bank loans was considered a bold move.
He succeeded in persuading middle-class investors to participate in the offering. Subsequently, Reliance began holding its annual general meetings (AGMs) with the participation of ordinary shareholders, thousands of whom attended in person.
According to a social media post by Reliance Industries, approximately 35,000 shareholders were present at the company’s AGM held at Mumbai’s Cross Maidan in 1986.
Dhirubhai Ambani died in Mumbai on July 6, 2002, at the age of 69.
Reliance’s Expansion Beyond Textiles
Before his death, Reliance had expanded into the refining business, launching its oil refinery in Jamnagar in 1999. The refinery is described as one of India’s most ambitious projects. US Secretary of State Marco Rubio recently visited the facility.
After Reliance Industries, Reliance Power launched its IPO in 2008, followed by Reliance Nippon Life Asset Management in 2017. Both companies, however, were owned by Anil Ambani, Dhirubhai’s younger son.
The Reliance Group that entered the stock market under Dhirubhai Ambani’s leadership 49 years ago has undergone significant changes. What began as a textile business has grown into Reliance Industries, with operations spanning petrochemicals, refining, energy, telecommunications, retail, digital services and media.
The history of Reliance’s first IPO illustrates how the company’s approach to raising capital helped expand share ownership in India. As Jio Platforms’ ₹30,213 crore offering draws record applications, the 1977 IPO remains an important chapter in the group’s evolution and in the growing participation of ordinary Indians in the stock market.
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