Market Structure

Indian family conglomerates own many valuable brands

In a distinctly Indian phenomenon, family conglomerates own 26 percent of the BrandZ™ Top 50 Most Valuable Indian Brands, and a significant number of India’s other leading brands across most categories, from industrial products to FMCG.

Most of the Indian conglomerates were formed over 65 years ago, before the establishment of India as an independent nation, during the period of British rule, at a time when India’s middle class first expanded and local entrepreneurs found ways to align with the government’s nation-building agenda.

When conglomerates worldwide often failed to produce productive synergies among their many holdings, many Indian family conglomerates expanded their holdings and built master brands that confer authority across disparate categories while accruing economies of scale. They’ve also succeeded where many family businesses fail, transmitting a sense of mission and entrepreneurialism to successive generations.

There are around 40 prominent Indian family conglomerates. The largest include: Adani Group, Aditya Birla Group, Bharti Enterprises, Essar Group, Godrej Industries, Mahindra Group, O.P. Jindal Group, Reliance-ADA Group, Reliance Industries, Sahara Group, and Tata Group.

Indian family conglomerates overall score significantly higher than MNCs (Multinational Corporations) in brand power, the BrandZ™ measurement of brand equity and a brand’s ability to drive market share. Factors driving this result include:

Prior to British rule, India experienced centuries of dynastic leadership. These family conglomerates adapted India’s traditional governance structure and applied it to commerce. Over time, they leveraged their privilege, knowledge of the system, and access.

Family is the primary social unit in India, perhaps more than in many other nations. Until recently, individual prerogatives were secondary to the needs of the family. The family dynasties match this cultural characteristic.

Trust plays and important role in Indian society. A family name on a product or service assures consumers with promises of quality and reliability even across unrelated categories.

The conglomerates are not building family wealth alone, although they’re often tremendously wealthy. They’re also building businesses to serve a nation. This mission provides guidance and continuity for successive generations.

Local Roots
Local knowledge and connections, important factors for success in any market, are especially critical in India because of complexity and diversity. Success requires getting the subtleties right.

In culture, Indian conglomerates respect tradition and family; in operations, they adopt the most upto- date, global best practices. This duality is part of what makes them successful and particularly Indian.

Prominent Indian Family Conglomerates

Adani Group
Established in 1988, the Adani Group focuses on developing infrastructure, logistics and energy to meet the needs of a more pr osperous India. The company’s businesses include coal mining, development and operation of seaports and railways, and electric power generation and delivery. The Adani Foundation promotes inclusive growth by focusing on these areas of concern: education, community health, job development for people in need, and rural infrastructure.

Aditya Birla Group
Outside of India, Aditya Birla is best known for its industrial products, including copper, aluminum, cement, and fertilizer. Indians think of it for fashion, telecommunications, financial and retail. Its brands in India include Idea Cellular. The Aditya Birla Group was formed in 1857, in the village of Pilani in the Rajasthan desert, where Seth Shiv Narayan Birla started a cotton trading business. Today, the Group’s operations extend to 36 countries.

Bharti Enterprises
Bharti operates businesses in telecom, insurance, retail, digital TV and foods. The telecom business is present in 20 countries across Africa and Asia, and includes a joint venture with Japan’s Softbank. Bharti’s retail operation included a six-year joint venture with Walmart. Founded in 1976, by Sunil Bharti Mittal, the company developed first as a manufacturer of bicycle parts, and started in telecom services by launching a mobile services business in Delhi, in 1995.

Essar Group
Essar Group operates primarily in steel, energy, infrastructure, shipping, ports and logistics, and services, including telecommunications, in over 25 countries. The company was incorporated in June 1976. Godrej Industries Established in 1897 as a lock company by inventor Ardeshir Godrej, Godrej Industries today includes: real estate; FMCG, particularly home care and personal care products; chemicals; and agribusiness, with products such as animal feed and palm oil. As advocates for inclusive growth, Godrej operates its “Good & Green” program to help more low income people find productive employment and to make more affordable and environmentally responsible products available to them.

Mahindra Group
Mahindra has a presence in a wide range of industries, including: aerospace, agribusiness, automobiles, automobile aftermarket, construction equipment, defense, energy, farm equipment, finance and insurance, industrial equipment, IT, leisure and hospitality, logistics, real estate, and retail. Two brothers, J.C. Mahindra and K.C. Mahindra, and Malik Ghulam Mohammad, incorporated the original company, Mahindra & Mohammed, in 1945, in Punjab, to trade steel. The company entered automobile manufacturing in 1947. Today, the company is especially well known for its SUV brands and tractors.

O.P. Jindal Group
An industrial conglomerate, O.P. Jindal Group maintains interests in steel, cement, mining, and power. Founder O.P. Jindal opened the company’s first steel plant in Hisar, in northwestern India, in 1952. The company’s operations today span the globe. Reliance–ADA Group Reliance Anil Dhirubhai Ambani Group is present in many sectors including: communications, infrastructure, financial services, entertainment, power, healthcare, technology, cement, real estate, food, and logistics. The group formed in 2005, when the two brothers running Reliance Industries split that company into two entities.

Reliance Industries
The business interests of Reliance Industries include: retail, telecommunications, and petrochemical exploration, refining and production. The wide range of retail holdings includes Reliance hypermarkets, specialty stores in both food and non-food, and relationships with major international brands. Founder Dhirubhai Ambani incorporated Reliance Textiles Industries Private Limited in 1966. After an IPO (Initial Public Offering) in 1977, the company focused on vertical integration, connecting its textile business in polyester fibers to the petrochemical business.

Sahara Group
Sahara India Pariwar interests include: infrastructure and housing, sports, finance, retail, power, manufacturing, IT, media, entertainment, tourism, healthcare, dairy, hospitality, and power. The Group owns several sports teams and major interests in London’s Grosvenor House Hotel and New York’s Plaza Hotel.

Tata Group
The Tata Group operates over 100 companies, across the world, in seven business sectors: communications and IT, engineering, materials, services, energy, consumer products, and chemicals. Among the companies are: Tata Motors, with brands such as Jaguar Land Rover; and Tata Docomo, the telecom. Formed from a trading company that Jamsetiji Nusserwanji Tata established in Bombay, in 1868, the company entered its first major industrial business, in 1874, with the establishment of the Central India Spinning, Weaving and Manufacturing Company. Over time, the Group entered the airlines and automobile businesses. And it 1952, it created the first popular Indian cosmetic brand, Lakmé, now owned by Hindustan lever.

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Methodology and valuation by Kantar Millward Brown

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