The Polyster Price

to stock exchange rules, ownership transfers were to be made within one month of delivery, but by late February 1987 investors and brokers were screaming that some 3 million shares were still in limbo. By keeping these out of the market, the company created a scarcity of floating shares that helped keep the price rising from the lateDecember nadir.

The financial pressure was off, temporarily. Reliance had the funds to complete its PTA and LAB plants, which were way behind schedule (the polyester staple fibre plant had opened six months late, in July 1986), and to refurbish its image of tech- nological prowess. And Dhirubhai could still claim that the small investors believed in him, in their millions. Reliance now claimed the largest shareholder base of any company in the world: 2.8 million.

But the fight against the bears in the stockmarket over 1986 to stop a freefall of his share price had drained his personal reserves, the parallel fund that had sustained the Ambani magic. Huge amounts had been spent on counter-publicity to the Indian Express and efforts to block his political critics. One senior broker close to Dhirubhai at that time estimated that Dhirubhai had lost about Rs 5 billion by early 1987, not including the fall in value of his sharcholding.

Dhirubhai would also have known by then that the Indian Express had been right in its forecast of a drastic profit decline for Reliance, its first since listing. In fact his forecast of a profit rise for 1986, made less than two months before the financial year closed, in retrospect looked puzzling. The annual results for 1986 that were published in April 1986 showed net profit had dropped to a mere Rs 141.7 million, lower even than the first half profit the G Series prospectus had reported, and an 80 per cent fall from the 1985 profit.

And then there was the unshakeable enforcer Bhure Lal, eyes fixed ahead, who had quickly dismissed an attempt at a concil- iation by Mukesh Ambani at a meeting granted during the year. By January 1987, Dhirubhai would have been hearing back from his contacts in Du Pont and Chemtex, and the dilemma his deals had put them in. The Customs Service was about to issue its show-cause notice on the allegedly smuggled yarn plant in February Dhirubhai had some more financial breathing space, but he was still in a closing trap.