Mukesh Ambani, 59, has all but completed massive investments in his petrochemicals empire, whose cash flows give him the firepower to promote and expand his new fourth-generation mobile service. He hopes to turn the network into a payments gateway: suddenly a very valuable proposition in a country where 86 percent of existing currency was outlawed by government diktat last month.
Reliance Jio snagged 50 million mobile subscribers in 83 days. It’s unclear whether that Facebook-beating growth can be sustained — or become profitable — when the service stops giving away free data sometime after March. What Ambani has managed to do is to push down per-user revenue for his competitors, which have been forced to cut prices.
There’s still no evidence he’s taking market share away from Bharti Airtel Ltd., Vodafone Group Plc and Idea Cellular Ltd. Regardless, the trio are guaranteed an uneasy 2017.
Reliance’s biggest advantage is its balance sheet. During the pre-2008, liquidity-fueled boom for Indian businesses, Ambani stayed away from expensive deals of the kind that have returned to haunt India Inc.
A crucial bone of contention between Ratan Tata and Cyrus Mistry, who was fired as chairman of the Tata Group by the scion in October, was its 2006 acquisition of Corus Group Plc’s British steel assets for $12.8 billion.
That decision saddled the $103 billion salt-to-software conglomerate with debt and losses. With the Tata vs. Mistry spat showing no sign of abating, 2017 looks more likely to be a washout than a watershed for the group.
Kumar Mangalam Birla’s commodities empire might pack a bit more punch next year, especially if the recovery in metals prices continues to benefit Novelis Inc., the U.S. aluminum maker that the billionaire Indian tycoon acquired in 2007 for $5.7 billion including debt, making it another of those overly optimistic global takeovers that didn’t exactly go to plan.
