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Tata brand 57th in global order

With a valuation of Rs 24,396 cr, Tata is way ahead of any other Indian name

india Updated: Jan 28, 2006 19:45 IST

The Tata brand is being valued at a whopping Rs 24,396 crore or $5.37 billion. This is way ahead of any other Indian brand and is ranked at 57th in the global pecking order. The group also envisages that it will invest anything upwards of Rs 1,80,000 crore in the next 8 to 10 years.

Talking to media, Tata Sons executive director R. Gopalakrishnan said that "not many Indian companies have undertaken this exercise barring one IT company, but I believe we are head and shoulders above other Indian brands." Gopalakrishnan also listed out three new areas — telecom, retail and insurance — which will require substantial investments. He said, "As far as growth is concerned, we believe that some of the traditional businesses like steel and soda ash will witness much faster growth given the current consumption trends." Giving details of the brand valuation exercise being conducted by Pathfinders, Gopalakrishnan said that a total of 17 companies have been valued. In 1997, a similar exercise was conducted for five companies and the brand value was only Rs 3,700 crore.

The Tata Sons executive director said that the combined revenues of these 17 companies would be in the vicinity of Rs 45,000 crore. Out of the total valuation of Rs 24,396 crore, as much as Rs 11,629 was accounted for by the name Tata itself where the seven companies and products were bearing the group's brand name. The remaining valuation or Rs 12,767 crore was for "Tatas with sub brands." Gopalakrishnan said that four independent brands of the group — Titan, Voltas, Tetley and Trent — were valued at Rs 1,500 crore despite not having a Tata name either for the company or the product.

The brand exercise by Tatas assumes importance in the wake of the group's increasing business-cum-acquisition spree in the international market with the Tata Sons executive saying that "we are building Brand India with Brand Tata." Tata Sons, which takes brand equity and promotion fees from the 33 listed group companies for building up brand Tata, feels that there is a tremendous future for the group in areas like steel and soda ash, where it has made global acquisitions.

Gopalakrishnan said the brand valuation exercise was being done since 2001 twice a year and Tatas were way ahead of their peers in various aspects and the same was reflected by group chairman Ratan Tata's new year message to all the employees in which he said that "be bold... have courage... take risk …go out and do things." During the years 2001-03, the perception about Tatas was not so good, maybe due to "performance, Tata Finance, Tata Motors (which posted losses) and Indica. At that time we thought the report was not correct," Gopalakrishanan said in a lighter vein, but added that the group came in for severe criticism on account of Tata Finance.

However, after a lot of soul searching the path forward was determined and each of the group companies was being encouraged to make its own plans. Besides, the group exited from a lot of non-core areas, including cement, cosmetics and pharma in recent years.

The restructuring exercise and the measures taken to cut costs also helped to give better performance perception and all this collectively pushed up the brand value of the group companies. "As much as Rs 4,000-5,000 crore cost was cut down in the last five years. Tata Steel and Tata Motors alone cut down expenses by up to Rs 3,000 crore," he said.

First Published: Jan 28, 2006 19:45 IST