Intellectual capital (IC) shows a significantly growing acceptance as a worthy topic of academic investigation and practical implication. The main objective of this study is to determine the monetary value of intellectual capital and to examine whether the joint explanatory power of intellectual capital (IC), book value (BV) and earnings (residual income based on GAAP) for stock price is superior to that of earnings and book value of Indian companies. Additionally, the study aims to investigate the impact of intellectual capital on corporate value creation. This study is conducted on 110 leading knowledge companies operating in India during the period 2007 to 2011. An appropriate method is to be applied for measuring the intellectual capital performance of the company. In our study we extend the Ohlson’s (1995) discounted residual income method to rationally measure firm’s value by considering intellectual capital (IC). Regression models are examined in order to test the hypotheses included in the proposed conceptual framework. The empirical findings suggest that the efficient management of company’s intellectual capital, in addition to earnings and tangible assets, can explain corporate value. Results proved that, in the Indian business context, the development of Intellectual resources seems to be one of the most significant factors of success. This study extends the understanding of the role of intellectual capital in creating corporate value and building sustainable competitive advantages for companies in emerging economies like India and may bring implications for valuation and reporting of intellectual capital.