India’s top 50 brands pack a mean punch

WONDER how much you would need to cough up if you were to rent out the Reliance Industries (RIL) brand from its shareholders in perpetuity? Seen a little differently, the bill would be the same for the Mukesh Ambani-run rigs-to-retail behemoth too, assuming it did not own the RIL brand and needed to license it from a third party — this is the relief-from-royalty approach to brand valuation, for the uninitiated. So, even while all physical assets from the KG basin gas reserves, the world’s third largest petroleum refinery at Jamnagar to the hundreds of retail stores across the country, stay with Mukesh, there would still be this little matter of writing a cheque for, hold your breath, Rs 26,425-crore ($5.8-billion). London-headquartered global brand valuation firm Brand Finance’s India Top 50 Most Valuable Brands (BF Top 50), presented exclusively by ET, studied only listed consumer-facing corporate brands (and not holding companies that own a portfolio of branded businesses).

16 brands valued at $1 bn-plus

The combined valuation of the top 50 add up to a whopping $50.8 billion. Much of it is spread out evenly across sectors — from software, steel and petroleum to airlines and banking —, proof that brands can create significant economic value even outside the traditional consumer goods sector. The top ten on the list are: RIL ($5.8 billion), Indian Oil ($4.2 billion), Tata Consultancy Services ($4.02 billion), State Bank of India ($3.14 billion), Tata Motors ($2.654 billion), Wipro Technologies ($2.650 billion), Bharat Petroleum ($2.48 billion), Hindustan Petroleum ($2.05 billion), ICICI Bank ($2.04 billion) and ITC ($1.71 billion).
There are as many as 16 corporate brands valued at over a billion dollars. Besides the top 10, they are Airtel ($1.70 billion), Infosys Technologies ($1.61 billion), Tata Steel ($1.52 billion), Reliance Communications ($1.32 billion), Larsen & Toubro ($1.11 billion) and Maruti Suzuki India ($1.01 billion). There’s a possibility that half-a-dozen more brands could breach that mark by the time ET presents the second edition of this study next year. The brands from the oil and gas sectors made a mark by occupying four slots in the elite club, followed by IT and automobiles with three brands each. Much of this comes from the sheer scale and strength these brands command in their respective industry sectors.
Interestingly, the banking and financial sectors make a strong brand statement with 13 entries in the BF Top 50, the highest for any one sector. It is followed by IT with six brands. Oil and gas, auto and pharma are happily perched with five brands each in the overall list. As one goes along, one can discover that even sectors such as power haven’t done too bad either with three brands in the of Top 50 roster. While there’s a clear pattern, it is interspersed with telecom, cement and steel brands making an appearance to confirm that they are at it. And things could change in the coming years, considering these sectors are on a strong growth trajectory. For a typical company in India, the value of intangibles as a percentage of enterprise value stands at 76%. And brands make up a significant part of that. So, on a larger platform, the BF Top 50 list should serve as a wake-up call to corporate India to recognise brands as significant assets driving business value.

Shailesh Dobhal & Bhanu Pande