HE CALLS CAPTAIN NAIR of The Leela Group ‘uncle’, and should the chain of hotels and resorts be threatened, Nair has said he will turn to his “nephew”. Many say he was the white knight that rescued the Oberoi group of hotels from being swept up by rival ITC. He is taking on Louis Vuitton in the world of luxury, and his Indian Premier League (IPL) cricket team, Mumbai Indians, finished runners-up last season.
As the chairman and managing director of Reliance Industries (RIL), Mukesh Ambani’s oil and gas moves make headlines. But almost unnoticed is the foray of one of the world’s wealthiest men and most powerful companies (ranked second on the Fortune India 500 list) into leisure.
Even as Louis Vuitton’s regional investment arm nearly sealed a deal to buy around 15% in Mumbai-based, Rs 3,355 crore jewellery major Gitanjali Gems, there was speculation that RIL was in the fray as well. A company spokesperson denied that RIL was involved.
Ambani’s Reliance Brands is local partner to global fashion giants such as Ermenegildo Zegna and Diesel. Ambani also plans to buy stakes in a few Indian designer labels, injecting up to Rs 10 crore in each. “We are here for the long haul and are looking to grow and develop the market,” says Darshan Mehta, CEO, Reliance Brands.
“I would rather do business with Mukesh than anyone else,” the 88-year-old Nair said. “I can always go to him if there is any problem.”
There’s concern within the Leela Group, about a near 11% stake that rival ITC holds in the chain. And Nair’s confidence stems from Ambani’s investment in East India Hotels (EIH) and its Oberoi hotel chain last year.
Ambani picked up 14.12% of the group for $217 million (Rs 964 crore), and this was seen as a check-mate move by the EIH management to prevent a takeover by ITC. In this case, P.R.S. Oberoi, the EIH chairman and an octogenerian like Nair, preferred Ambani’s investment over the other suitors’.
“There is no doubt that RIL wants to explore non-core sectors,” says Jagannadham Thunuguntla, chief strategist and head of research at SMC Global Securities, a broking house. “Leisure is going to be big. He wants to make an early entry into promising sectors.” He adds that the forays into luxury and hospitality also tie in with Ambani’s larger goal of being present in sectors allied with retail. Reliance Retail has 1,150 stores in 86 cities and expects to grow 10 times to Rs 45,000 crore in five years.
Nita Ambani, wife of Mukesh Ambani, is already the visible face of the Dhirubhai Ambani International School, as well as the Mumbai Indians franchise, which boasts cricket legend Sachin Tendulkar in its ranks. According to RIL insiders, the new empire, which is being carved out, has the special attention and leadership of Ambani’s better half.