Ambani overtakes Gates to become world's richest man

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A record-breaking performance by India's stock markets has put the industrialist Mukesh Ambani at the top of a list of the world's richest people.

Buoyed by unprecedented inflows from US and European investors, the benchmark Mumbai Sensex stock index topped 20,000 for the first time yesterday – having almost doubled in value in the last two years.

One of the results of the surge in share prices has been a boost for Mr Ambani's Reliance Industries, a powerhouse of the country's industrial strength and its most valuable firm. Its excellent performance, along with that of two other of the group's companies, saw the net worth of its chairman and managing director rise to $63.2bn (£30.6bn) yesterday.

The Press Trust of India reported that the increase placed Mr Ambani above such figures as Microsoft's Bill Gates and Mexico's Carlos Slim Helu, who are each worth just over $62bn.

Reliance Industries, which was founded by Mr Ambani's father, Dhirubhai, spans oil, textiles and biochemicals and has annual revenues of $27bn, close to its fellow Indian conglomerate Tata Industries. Mukesh Ambani and his estranged younger brother, Anil, split the group's assets on their father's death in 2002.

The performance of companies owned by both brothers have been equally remarkable in the recent run by the Indian stock market. The Sensex has risen about 39 per cent since it became the third emerging market after China and Russia to surpass $1 trillion in May, helped by economic growth of around 9 per cent a year and a strengthening currency.

Shares in Reliance Industries, which has the heaviest index weighting on the Sensex, have risen by nearly 80 per cent this year. Indeed, Reliance Industries, operator of the world's third-largest refinery, has accounted for about a quarter of the Sensex's gain since it first crossed 10,000 points in February 2006.

Yet, for all the evidence of India's remarkable – if decidedly uneven – growth, economists and officials warn that if the country's progress is to continue, it will have to double its spending on infrastructure.

Finance Minister Palaniappan Chidambaram said that the money would have to be spent on roads, ports, power and other projects over the next five years.

Happily for the Ambani brothers, their group's performance is likely to continue to grow as it benefits from the Indian government's $492bn, five-year infrastructure spending programme.

Last month, Mukesh Ambani overtook steel czar Lakshmi Mittal to become the richest Indian in the world. Mr Mittal is currently ranked in fifth position, with a net worth of $50.9bn as a result of his 44.79 per cent take in the world's biggest steel maker, ArcelorMittal.

Meanwhile, Reliance Industries yesterday signed a production-sharing contract for two oil and gas exploration blocks in the Kurdistan region of northern Iraq, a senior company official said. The deal was signed with the Kurdistan regional government.

"To begin with, we will be 100 per cent stakeholders, but later on Iraq can mandate a company to have a stake in the blocks after discovery in line with their new law," said the official. "They have been given to us on a negotiation basis."