The-Polyester-Prince

slow-down in trading and sometimes pandemonium when defaults were found. But
brokers and traders need not settle even then, if they could afford the upfront
margin payments and sometimes exorbitant interest rates on finance for a badla
(carry-forward) deal.
Using this prototype futures system, settlement could be deferred for months, often
amplifying speculative runs in prices. On occasion, a script would pass through 50
buy and sell transactions before being lodged for transfer of ownership. If the
signature of the original seller did not pass muster, professional forgers operating in
the side lanes of Dalal Street would guarantee an authentic-looking copy. It was an
environment where research was just another word for insider trading, where the
key knowledge was finding out which stocks were going to be ramped upwards or
driven down by cartels of moneybag brokers and operators.
Though it had thousands of listed companies and a nominal capitalisation similar to
that of middle-sized stock markets like Hong Kong or Australia, the Indian
sharemarket was not very liquid. Huge blocks of equity in the better companies were
locked up by investment institutions or controlling families. Many of the smaller
companies hardly traded at all. The floating equity in the major companies forming
the market indices amounted to a few billion US dollars. Even in the 1990s, a
concerted move with a relatively small amount of funds, upwards of US$50 million,
could make the market jump or crash.
Investors outside Bombay who could not hang around Dalal Street, browse the issue
documents sold off barrows or pavements, or listen to the gossip while snacking on a
bhel puri (potato-filled puff-bread) from a nearby stall, had to rely on a network of
sub-brokers and agents reporting to the fully-fledged stockbrokers in the big towns.
They scanned a new crop of market tipsheets with names like Financial Wizard and
Rupee Gains for news of their stocks. In some small towns, investors impatient with
their remoteness took trading into their own hands: teachers, shopkeepers and other
local professionals would gather after work in public halls to conduct their own
trading, settling on the basis of prices in newspapers from the city.
It was a situation made for a populist like Dhirubhai. His ebullience and punctilious
nursing of relationships were transferred to a larger stage, using the mass
communications techniques learned in marketing the Vimal brand name.
‘The people of Reliance,’ began one typical promotion, on the cover of an annual
report. ‘Therein lies our strength. In the skills of the scientists, the technologists; in
the commitment of the engineers, the employees; in the dedication of the brokers
the traders and above all, in the undisputed loyalty of the investors. These are the
people of Reliance. In their growth lies our growth; in their prosperity, our
prosperity. For we are a family; we are all one. We are ... Reliance.’ In those years,
Dhirubhai and Reliance had a success story to tell. On the technical side, the
polyester plant at Patalganga was put up in a fast 18 months, and put into regular
production in November 1982. Construction and the debugging of production lines
had been supervised by Mukesh Ambani, who had been pulled out of Stanford
University immediately on completing his master of business administration degree,
and put in charge of the new project. Aged 24 at the outset, with a degree in
chemical engineering, Mukesh Ambani won his spurs as an industrial manager at
Patalganga.