Anil Ambani group rebrands: stocks surge; ad gurus split

DNA, 1st January 2011, Arcopol Chaudhuri MUMBAI

Four years after embarking on a rebranding exercise, the Anil Ambani group has retweaked its masthead, emphasising on 'Reliance' and erasing 'ADAG'.

So, R-ADAG now is just the 'Reliance Group' very similar to the name of elder brother Mukesh's empire. That was enough grist for the stock market mill: talk was this could mean a bigger deal between the brothers, which lifted shares of the group.

"It's possible the market is reading the new branding as reconciliation between the brothers," Jayesh Shroff of SBI Funds Management told Bloomberg.

Sanjay Behl, group head of branding and marketing at the company told newswires it was an attempt to consolidate all companies of the group under a single 'iconic' brand.

Behl told Dow Jones while Reliance Mobile will be called just Reliance, its 3G service will be called Reliance 3G and its GSM service Reliance GSM. Among the bigger brands, BIG TV will become Reliance Digital TV and BIG Pictures will become Reliance Pictures.

But the redesign, by Bonsey Design of Singapore, has experts divided Anand Halve, co-founder, Chlorophyll Brand Consultancy said he is not sure how the logo change will pan out.

Referring to previous incidents of logo changes such as that of Airtel, Godrej, Videocon, he said that branding makeovers are 'very expensive non-exercises'.

"I'd like to know what the new logo means for Reliance, besides a change in visiting cards, office stationery and letterheads. The brand has to change, not the logo alone. For an average Joe buying a Reliance CDMA connection in, say, Kanpur, there is just one company. It's Reliance - he isn't sure and probably doesn't even take sides to choose if it's Anil's or Mukesh's. But it may get the investor community excited."

Halve said there are many family-owned corporate businesses which have strategically retained or changed their name, depending on how profitable group companies were. "Bajaj Auto and Bajaj Electricals, K Raheja Group, Aditya Birla Group are some examples where company nomenclature has been strategically decided."

He said it must have taken a great salesman to make Anil Ambani drop the ADAG from the title of his group.

But Alpana Parida, president of DMA, a strategic branding and design firm feels that the ADAG' tag had diluted the strength of Reliance.

"By dropping it now, Anil is going back to the basics. It makes his group look stronger. It doesn't look like ADAG is something under an umbrella of Reliance. It makes ADAG the umbrella itself. Hence, just the title, Reliance."

Parida also believes there must have been some communication between the two brothers before deriding on the title that was announced on Thursday "Rebranding can often help rejuvenate the group. We did it with Dabur; globally Johnny Walker has also benefited from it. In the case of Reliance, there will be some confusion but the advantage will be Anil Ambani's."

Meanwhile, the group's stocks had a field day: shares of Reliance Communications and Reliance Broadcast Network rose 4.99% each, while Reliance Infrastructure popped 4% on Friday Other listed entities of the group surged between 1.8% and 2.6%.

The group's market capitalisation was up Rs. 3,741 crore to Rs. 113,026 crore on Friday.

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