The Covid-19 pandemic has been a devastating blow to the Indian economy, causing unprecedented losses in various sectors and industries. But it has also exposed the fragility and vulnerability of some of India’s most successful and wealthy businessmen, who have seen their fortunes dwindle in a matter of months.
According to a report by Business Today, India’s fallen billionaires include:
1. Venugopal Dhoot: who built India’s first homegrown consumer durables company, Videocon Industries Ltd (VIL), but lost all his major businesses — consumer durables, telecom, oil exploration — to insolvency after the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016.
2. Sanjay and Neeraj Singal: who ran Bhushan Steel (BSL) and Bhushan Power and Steel (BPSL) separately, but lost around Rs 55,000 crore wealth each as their companies were acquired by Tata Steel and JSW Steel respectively. They are also being investigated for money laundering and fraud.
3. Anil Ambani: who was once the world’s sixth-richest person with a wealth of $42 billion in 2008, but pleaded bankruptcy before a London court in September 2020. He lost his flagship Reliance Communications Ltd (RCom) and Reliance Naval and Engineering. Four other companies — Reliance Infrastructure, Reliance Power, Reliance Capital and Reliance Home Finance — had defaulted on loans before the Covid-19 outbreak but got relief for some time as the pandemic forced the government to suspend IBC until March 2021.
4. Rakesh Jhunjhunwala: who is known as India’s Warren Buffett for his value investing style, but suffered huge losses in his portfolio as the stock market crashed due to the pandemic-induced lockdowns. He reportedly sold off most of his holdings in March 2020 at a loss of over Rs 10,000 crore.
5. Radhakishan Damani: who is one of India’s richest entrepreneurs with a net worth of over $20 billion as of July 2020, but saw his wealth decline by over $5 billion due to falling share prices of his companies — Avenue Supermarts Ltd (DMart), DMart Retail Ltd (DMRT), DMart Logistics Ltd (DML) and DMart Express Ltd (DME). He also faced legal troubles as he was accused of tax evasion by the Income Tax Department.
These are just some examples of how India’s billionaires lost their fortunes in the pandemic. The report also mentions other names such as Kumar Mangalam Birla, Dilip Shanghvi, Subhash Chandra Ambani, Gautam Adani, etc., who have also faced financial challenges due to the crisis.
The report suggests that these businessmen failed to adapt to the changing market dynamics and consumer preferences caused by the pandemic. They also made high-cost expansion funded by debt that became unsustainable when revenues declined sharply. Moreover, they diversified into unrelated areas that did not match their core competencies or added value to their businesses.
The report concludes that these businessmen need to learn from their mistakes and focus on improving their corporate governance practices. They also need to be more agile and innovative in responding to new opportunities and threats in a post-pandemic world.
