Covid-19 Impact: India’s Richest Man Lost $300 Million a Day over 2 Months
Thu, April 22, 2021

Covid-19 Impact: India’s Richest Man Lost $300 Million a Day over 2 Months

 

Reliance Foundation has further set up India’s first Covid-19-dedicated hospital in Mumbai. / Photo by Mongkolchon Akesin via Shutterstock

 

The Covid-19 pandemic is wreaking havoc globally, even affecting some of the world’s wealthies people like the richest man in India, Mukesh Ambani, whose net worth fell $300 million each day for the past two months.

 

Mukesh Ambani: India’s richest man

The head of the oil gas telecom conglomerate Reliance Industries is known as the richest person in India with an estimated net worth of $58.4 billion. He is more than $43 billion richer than the second richest person in their country, Shiv Nadar.

Hurun Global Rich List, a ranking of the world’s dollar billionaires, previously ranked the 62-year-old Ambani as the top 10 richest men in the world but his position dropped down to 17th as factories were closed and operations were halted in the country due to the pandemic. In the first week of February, the share price of Reliance Industries was at Rs 1,457.

Other industry captains also experienced the same fate as Ambani. For instance, chairman of IT company HCL technologies Shiv Nadar lost $5 billion or 37% of his wealth, reports business news platform The Financial Express. Multinational conglomerate Adani Group’s chairman Gautam Adani also lost $6 billion or 37% of his wealth. Indian billionaire banker and managing director of Kotak Mahindra Bank Uday Kotak similarly suffered from the impact of Covid-19. His wealth plummeted by $4 billion or 28%. These three businessmen dropped their rank in the Hurun Global Rich List.

Hurun Report India’s managing director Anas Rahman said that the top entrepreneurs in India have been affected by the 5.2% drop in the value of rupee vs. US dollars and the 26% drop in the stock market.

 

Second biggest wealth loser in the world due to pandemic

Ambani is the second biggest wealth loser in the world after French billionaire Bernard Arnault, the chief executive of luxury goods company LVMH. Arnault, 71, also lost $30 billion in the past two months.

Despite a decline in the demand of global energy, analysts said that Reliance Industries Ltd will emerge stronger as its net debt will fall even if retail and energy demand struggle for half a year and asset sales are delayed. Net debt is a metric that indicates the overall debt situation of the company by netting the debts of the company and the value of its liabilities along with cash and other liquid assets. In simpler terms, it is the total debt of a company minus its assets considered cash on hand.

 

 

Billionaires with largest wealth drop

The billionaire with the largest drop in wealth in the two months up to March 31, 2020 include Warren Buffet of Berkshire Hathaway ($19bn wealth drop, -19% changes in the 2 months), followed by Amancio Ortega of Inditex ($17bn, -21%), Carlos Slim Helu and family of America Movil ($17bn, -24%), Bill Gates of Microsoft ($15bn, -14%), Mark Zuckerberg of Facebook ($13bn, -15%), Larry Page of Google ($13bn, -19%), Sergey Brin of Google ($12.5bn, -18%), and Michael Bloomberg of Bloomberg ($10bn, -17%). Hurun calculated the wealth of these billionaires based on the market data in United States dollars.

 

Ambani's plan to fight the pandemic

The conglomerate is planning to fight the pandemic by deploying the capacity of its arms, including the Reliance Foundation, telecommunications company Reliance Jio, and Reliance Retail. The Reliance Industries will reportedly donate Rs 5 crore to the government’s relief fund and will also produce safety suits and face masks to help the workers of the country. The company said in a statement that it will increase its production capacity of 100,000 face masks per day because the health workers in the country are struggling to get the proper equipment. It will also be providing free fuel to emergency vehicles in India that are carrying Covid-19 patients. Free meals will likewise be offered in various cities to support the livelihood of people affected by the health crisis.

Reliance Foundation has further set up India’s first Covid-19-dedicated hospital in Mumbai. With a 100-bed capacity, the hospital was built in collaboration with Brihanmumbai Municipal Corporation (BMC). All beds are equipped with biomedical equipment, including patient monitoring devices, dialysis machines, pacemakers, and ventilators, and with the needed infrastructure. The foundation has also offered to develop a special medical facility to quarantine travelers from other countries and other suspected cases through the country’s contract-tracing. “Our doctors and researchers are also working overtime to find a cure for this deadly virus,” the company statement reads.

Meanwhile, Reliance Jio plans to make data more accessible to people by providing 10Mbps JioFiber connectivity while Reliance Retail will be making sure that there will be a steady supply of groceries in their outlets so that Indian citizens do not resort to panic buying.

 

Free meals will likewise be offered in various cities to support the livelihood of people affected by the health crisis. / Photo by addkm via Shutterstock

 

The net worth of Reliance Industries FY 2014- 2019

According to database company Statista, Reliance industries reported a net worth of more than 1.9 trillion rupees in the fiscal year 2014, 2.1 trillion in FY 2015, 2.3 trillion in 2016, 2.5 trillion in 2017, 2.8 trillion in 2018, and 3.2 trillion in 2019. The last recorded net worth was a 12% growth compared to the previous year.  Most of the revenue comes from refining, retail, and petrochemical businesses.

Amazon’s CEO Jeff Bezos also lost $9 billion in the two months although he remained the richest man in the world with a $131 billion net worth. Eric Yuan Zheng of software company Zoom Video Communications saw an increase of $3.5 billion in his wealth. The 77% growth rate of wealth is among the fastest in the world’s billionaires. Zoom’s stock price nearly doubled in the past two months and is worth $146 per share.

While there are three Indians who were removed from the top 100 Hurun Global Rich List, six Chinese billionaires were added in the league. By continent, Asia has 1,364 billionaires and a total combined wealth of $4,409 followed by North America with 692 billionaires and a combined wealth of $3,891, Europe (962 billionaires, $ 2,404), South America (106, $274), Oceana (42, $136), and Africa (21, $71).

The coronavirus is a serious threat to the public and has no respect for social boundaries. It’s nice to know that some of the world's wealthiest are taking a bold move to combat the outbreak despite feeling the sting of the market turmoil.