Why Anant Ambani’s $600 Million Wedding Is Just Business As Usual

Anant, the youngest of the 67-year-old’s three children, kicked off his wedding celebrations in March. Rihanna performed at a wedding party held at a 3,000-acre private nature reserve at Ambani’s refinery complex on India’s west coast. The festivities concluded with two back-to-back galas over the weekend in Mumbai, with most of Bollywood showing up to shake a leg, as did the Kardashians. This was two weeks after a pre-wedding party headlined by Justin Bieber. In between, the party continued with a European cruise, joined in Italy by the Backstreet Boys — and in Cannes by Katy Perry.

From Mark Zuckerberg of Meta Platforms Inc., a major investor in Ambani’s digital ambitions, to Jay Y. Lee, the boss of Samsung Electronics Co., which supplies him with 5G equipment, guests who sampled the merriment at one event or another were reminded of the family’s unparalleled status in Indian corporate life. Media estimates put the total cost of the festivities at $600 million.

A glimpse of the opulence was made available to the general public via Ambani’s news media. I don’t know what gifts the guests brought, but the groom’s close friends went home with Audemars Piguet watches in 18-karat rose gold. Meanwhile, many of the 480 million customers of Ambani’s Jio wireless service will pay a 21 percent increase in data starting this month. While that has become the subject of online memes, the more serious question is: Why put the family fortune on display now, when Brazil has proposed a 2 percent annual tax on the world’s super-rich?

Indian steel magnate Lakshmi Mittal rented the Tuileries Gardens in Paris — and Louis XIV’s palace at Versailles — for his daughter’s wedding in 2004, two years before he won the bidding war for Luxembourg’s Arcelor SA. The six-day bash reportedly cost $60 million. It was a different milieu. The Ambani family not only set a new record, they also became the biggest spender at home. And they did so amid a turbulent domestic political landscape and criticism of the acute inequality of India’s “billionaire Raj.”

Prime Minister Narendra Modi’s grip on power has weakened since his party lost its parliamentary majority last month. During a fierce election campaign, Rahul Gandhi, the main opposition leader, relentlessly attacked Modi for working only in the interests of two businessmen: Ambani and Gautam Adani. Economists Josh Felman and Arvind Subramanian call it “India’s 2A variant of stigmatized capitalism.” The favoritism of a small clique, they say, is one reason why foreign direct investment in India is declining and private capital spending is stagnating. No one wants to take on the national champions.

It will be interesting to see whether a changed political reality forces Ambani’s consumer empire to face more competition. Tellingly, Modi showed up to greet the newlyweds, as did leading opposition leaders. Gandhi stayed away.

But Ambani may be taking a calculated risk with his political management skills. The priority is to sustain the 43 percent rally in shares of his flagship Reliance Industries Ltd. over the past eight months. That will take some guts and enthusiasm to gain an edge over his main rival. Adani, 62, has shrugged off last year’s brutal short-selling spree. He is unlikely to be limited to infrastructure such as ports, airports, data centers and building materials. Adani wants one in three Indians on his fledgling super app by the end of the decade. How will he ever acquire them without competing with Ambani in a large consumer-facing industry such as telecom or payments?

It is this moat that Ambani must protect. After agreeing to merge his media business with Walt Disney Co.’s TV franchise in India, he has a lock on Bollywood and cricket, the two offerings that unfailingly draw attention in the world’s most populous country. A new consumer finance and payments unit — spun off from the mother ship last year — is hiring key executives. A public offering for the digital platform, perhaps as early as next year, followed by one for India’s largest retailer, would leave Ambani in an unassailable position. A secure empire can be safely entrusted to the next generation.

This is not the time to lie low, but to exude confidence. Morgan Stanley’s Michael Grimes, who helped Reliance raise more than $20 billion from Zuckerberg and other investors during the pandemic, was on the guest list. He should be one happy tech banker. His firm’s analysts expect the conglomerate to add $100 billion to its $260 billion market cap.

And why not? More than a billion Indians are looking for a way out of staggering youth unemployment, meager wages and stubbornly high inflation. As long as they pay for the data, Ambani will provide all the distractions they need on their smartphones and broadband TVs — and even throw in snippets of a $600 million wedding.

Disclaimer: This is a Bloomberg Opinion article and these are the personal views of the writer. They do not reflect the views of www.business-standard.com or the Business Standard newspaper.

First print: Jul 16, 2024 | 08:19 AM IST