Home / Companies / News /  SP Group exit unlikely to dent country’s most valuable brand

The exit of Shapoorji Pallonji Group is likely to have little effect on the Tata brand value, which has consistently topped rankings of Indian companies, brand experts said.

In 2020, Tata retained its title as India’s most valuable brand in a Brand Finance India report for the third straight year. During the year, it crossed the $20-billion value mark, up from $19.6 billion in 2019 and $14.2 billion in 2018.

Tata is the only Indian brand to feature in the 2020 edition of the top 100 of the Brand Finance Global 500, a ranking of the world’s 500 most valuable brands.

The Mistry family has on several occasions said that its exit from Tata Sons, where it is the single largest shareholder, will depend on the valuation it gets for the stake as well as the corresponding share of the Tata brand.

The SP Group’s offer to exit may seem like an umbilical cut, but it will not have any impact on Tata Group’s business, said Harish Bijoor, brand strategy specialist and founder, Harish Bijoor Consults Inc. “Tatas, as a brand, is a front-ended entity today, with businesses both in the B2B and B2C segments. I think businesses in the B2C segment do not recognize the back-end relationships and business relation changes; therefore, there will be no impact on the brand equity of Tata in the eyes of consumers. It will be business as usual for the B2B businesses as well," he added.

Sanjay Sarma, founder of SSARMA Consults, a boutique branding and communication advisory firm, said that when Mukesh and Anil Ambani parted ways, the Reliance brand suffered since the company was recognized by its owners. However, according to him, Tatas have invested heavily on building the brand on attributes like trust, which will help the company during the transition. “Consumer-facing businesses will not have any impact unless it shows up in the shareholder value going down drastically, which is unlikely to happen as the markets are already volatile. Not many people even know that SP Group is a large shareholder," he said.

Perceived as a trusted homegrown conglomerate, which focuses on values rather than profits alone, Tata Group operates a variety of businesses under companies such as Tata Motors, Tata Steel and TCS as well as in segments such as hospitality and retail.

Brand value is the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.

In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Based on this, Tata’s hospitality brand Taj (brand value $309 million) emerged as India’s strongest brand with a Brand Strength Index (BSI) score of 90.5 out of 100 this year.

“The sheer size and diversity of Tata Group could mean that it emerges from the covid-19 pandemic, relatively speaking, unscathed. Despite citing considerable difficulties in the current climate and warnings of a significant downturn in profits for some of its businesses, the group will hope that the stability and strength of the TCS and Tata Consumer Products Ltd brands will offset any damage to other arms of the group," said Savio D’Souza, director at Brand Finance.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Recommended For You
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsFeedbackRedeem a Gift CardLogout