Tata has moved up the ladder in a list of the world’s most valued brands despite the group’s name cropping up in the 2G-related tapes and group Chairman Ratan Tata’s dream project, Nano, having to contend with technical problems.
The annual survey undertaken by international agency Brand Finance, to be released soon, has placed Tata as the only Indian brand in the list of top 50, populated by Apple (number one in the pecking order), Google, Microsoft and Coca-Cola to name a few. Tata is the 45th most valued brand in the world, compared to 50th last year.
The valuation of the Tata brand has been pegged at $16.3 billion (Rs 81,500 crore), an increase of over eight per cent over its brand value in the survey last year. The current market cap of the group is Rs 4,47,000 crore.
| MOST VALUED BRANDS | ||||
| Top 5 global brands | ||||
| Brand | Rank | Brand value* | ||
| 2011 | 2012 | 2011 | 2012 | |
| Apple | 8 | 1 | 29.54 | 70.60 |
| 1 | 2 | 44.29 | 47.46 | |
| Microsoft | 2 | 3 | 42.80 | 45.81 |
| IBM | 4 | 4 | 36.15 | 39.13 |
| Walmart | 3 | 5 | 36.22 | 38.31 |
| *$ billion | ||||
| Top 5 Indian brands | ||||
| Brand | Global rank | Brand value* | ||
| 2011 | 2012 | 2011 | 2012 | |
| Tata | 50 | 45 | 15.08 | 16.34 |
| Airtel | 284 | 187 | 3.68 | 5.22 |
| SBI | 171 | 219 | 5.67 | 4.68 |
| Reliance | 133 | 237 | 6.99 | 4.36 |
| Indian Oil | 234 | 293 | 4.35 | 3.66 |
| Source: Brand Finance | ||||
The UK-based Brand Finance values various brands across the globe and then ranks them based on these valuations.
The brand that has seen the biggest growth in its value is Airtel, especially after the company, Bharti Airtel, which owns the brand, became a major player in the African markets after it took over Zain Telecom. Airtel has moved up 97 notches, with its ranking going up from 284 to 187. Also, its brand value has grown by a staggering 42 per cent from $3.68 billion to $5.22 billion in this year’s survey.
Information technology bellwether Infosys (ranked 297) is the other Indian company to have shown a rapid rise in its brand value, moving up 84 places with a brand value of $3.62 (or Rs 18,000 crore) this year, a growth of 25 per cent over last year.
Tata, Airtel and Infosys together contributed over 66 per cent to the total brand value enjoyed by Indian firms in the list this year.
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However, the number of Indian brands in the top 500 has fallen from nine last year to six, with BPCL, Wipro Technologies and ICICI Bank dropping out of the coveted list.
Those who have shown a steep decline but remain in the list are State Bank of India (ranked 219), Reliance Industries (237) and Indian Oil (293).
The six Indian brands on the list have added a total of $37.9 billion (or Rs 1.89 lakh crore) to the global league's intangible value in the top 500 list, lower than the $46.6 billion added by a total of nine Indian firms last year.
Unni Krishnan, managing director, Brand Finance India, said it was an indication that Indian companies needed to work on the long-term value of their brands. "It is not just about building size or increasing the turnover or market capitalisation, but about long-term wealth creation," he says.
But the Tatas, said Krishnan, stood apart thanks to the group's focus on nurturing brand value. "I can say with a fair degree of conviction that the Tata group is the only one amongst Indian as well as global firms to have rigour and focus instituted in the system to study the long-term impact on the Tata brand by actions undertaken by group companies," he says.
Tata Plan, the governance system put in place in the 1990s by Ratan Tata, has two aspects to it. One is called the Brand Equity and Business Promotion (BEBP). The other is called the Tata Business Excellence Model (TBEM). The first one, said Krishnan, was basically an agreement that made group firms commit to rigorous processes if they wished to have access to the Tata brand name. Charging royalty for using the Tata name is also part of this exercise. TBEM is a review process that looks at whether group companies have delivered on the metrics committed to.
Harish Bijoor, chief executive officer, Harish Bijoor Consults, said, "The Tata brand has a heritage. It has a value, which cannot get dissipated easily. If anything, it will survive and consolidate further." Santosh Desai, managing director and CEO, Future Brands, agreed. "Internationally, the Tatas have done well. And this has reflected in their ranking this year. In India, they've had some problems but not insurmountable ones," he said.