Aditya Birla firms to now pay to use the family name
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Live Events as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Aditya Birla Group has introduced a brand royalty framework requiring its listed operating companies to pay the promoter group for use of the Aditya Birla name, with the arrangement applicable from June 1, 2026.Under the new structure, group companies will pay 0.25% of revenue as royalty, subject to an annual cap of Rs 225 crore per entity.Grasim will pay 0.25% of its standalone revenue to the promoter group from June 2026, within the Rs 225-crore annual ceiling.
Managing Director Himanshu Kapania said that based on the company's estimated revenue of Rs 50,000 crore, the royalty outgo would work out to roughly Rs 125 crore, comfortably under the cap.Both Hindalco's India operations and its US-based subsidiary Novelis will pay 0.25% of revenue as brand royalty from FY27, also capped at Rs 225 crore annually each.The arrangement came up during Hindalco's Q1 FY27 earnings call on August 7, when Managing Director Satish Pai was asked to clarify a royalty disclosure made in Novelis's 10-Q filing.
Pai explained that the Aditya Birla brand is owned by Birla Group Holdings Private Limited (BGH), which had not charged any royalty for use of the group's marks in the past, an exception, he noted, among large Indian conglomerates.Pai described the new framework as marking "the transition from family-driven stewardship to structured governance," and said the royalty would go toward
investing in and strengthening the brand going forward. He added that the amount remains below Hindalco's materiality threshold and will not affect the company's capital allocation or dividend policy.As a SEBI-regulated entity, Hindalco will disclose the related-party transaction through exchange filings due in October, in line with SEBI's Listing Obligations and Disclosure Requirements (LODR) norms mandating biannual disclosure of such transactions.
The BriefWire