August, 2009

Intellectual property has gained an important role in the financial management of the companies by way of collateralization of its brand and technology. Earlier, IP financing was limited to IP securitization of the future cash flow of income from royalty and license fees. IP collateralization and IP securitization are two different modes of IP leveraging and IP financing. Collateralization of intangible assets help to increase the borrowing capacity of a company specially when the company has limited tangible asset to offer as security to the financial institutions.

Recently Kingfisher Airlines has managed to borrow Rs 2000 crores (US $ 400 Million) from State Bank of India by way of collateralization of its brand. This unique tool of IP financing may open new vistas of opportunities for the corporate world on the one hand and the banking industry on the other hand. There is a need for credible agencies for IP valuation for brand and technology and also for adaptation of this unique technology of financing by the Indian Banking Industry.

Brand valuation is an upcoming field for the professionals and the experts. Intangible Business of UK is a pioneer and well established group for the European Market for the established brands of various business houses and non-governmental organizations.

The CONE Building Brand Trust has published its Report 2009 for brand valuation of the global non-profit power brand 100 in collaboration with Intangible Business which shows that YMCA of the USA ranks the 1st position with the highest brand value of US $ 6.3 billion. (See the table of the top 10). Earlier we had reported through this column that Google gained the first position in corporate world with its brand valuation of US $ 101.4bn in the year 2009. Brand valuation is done for various purposes including raising money from capital market, dispute settlement, merger & acquisitions etc.

ITAG has planned for creating corporate awareness in the field of brand valuation and brand collateralization as a tool of financing by organizing seminars and workshop for business enterprises.

--Dr. D. R. Agarwal