The Aditya Birla Group has introduced a brand royalty framework for its listed operating companies. Under this, the firms need to pay the promoter group for use of the Aditya Birla name.
The arrangement will come at place from June 1, 2026. The new structure says that the group companies will pay 0.25% of revenue as royalty, subject to an annual cap of Rs 225 crore per entity.
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.
Textiles giant Grasim will pay 0.25% of its standalone revenue to the promoter within the Rs 225-crore annual ceiling.
Company’s 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.
Hindalco’s Managing Director Satish Pai had said 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.
In a separate development, nearly 25 lakh shares of UltraTech Cement Ltd, a part of the Aditya Birla Group, changed hands in a pre-open block window deal on Thursday.
Notably, Brokerages remain positive on Aditya Birla. They expect the financial impact on Grasim to remain manageable as Citi estimates the royalty at 0.25% of standalone revenue, while Jefferies has pegged the annual cost at around Rs 100-120 crore, which would be less than 5% of EBITDA.
Using ‘Aditya Birla’ Name Comes At A Cost: Grasim, Hindalco, Novelis To Pay Royalty
