The Economic Times daily newspaper is available online now.

    Hindalco arm Novelis eyes US IPO, files papers

    Synopsis

    The company is wholly owned by Hindalco through its subsidiary AV Minerals (Netherlands) NV, which will offload shares for the public offering. India-listed Hindalco will get all the proceeds from the sale, but the company did not disclose how many shares will be sold in the offer.

    Hindalco
    So far in FY24, Novelis' operating profit has accounted for three-fifths of Hindalco's consolidated earnings.
    Mumbai: Novelis Inc, the US-based subsidiary of Hindalco Industries, is eyeing a listing in the US and has submitted a draft registration statement to the Securities and Exchange Commission (SEC). This will not just be the first company from the Aditya Birla Group to get listed in the US but also the first by a large Indian conglomerate overseas. The public offering will be completed once the SEC finishes its review, subject to market and other conditions, Novelis said on Tuesday.

    The company is wholly owned by Hindalco through its subsidiary AV Minerals (Netherlands) NV, which will offload shares for the public offering. India-listed Hindalco will get all the proceeds from the sale, but the company did not disclose how many shares will be sold in the offer.

    "Novelis will not receive any proceeds from the sale of common shares by its sole shareholder," it said in a statement.

    The proposed listing plan comes as Novelis is building its first fully-integrated facility at Bay Minette, US, on which the company will be spending a little over $4 billion. This project, which will have a capacity of 600,000 tonnes, is to be commissioned in the second half of 2026.
    Hindalco Arm Novelis Eyes US IPO, Files Papers

    Capital Expenditure
    The company will subsequently look at doubling capacity through the brownfield route.

    Hindalco has pegged capital expenditure in the current financial year at Rs 4,500 crore, to be raised to Rs 5,000-5,500 crore next year. One of the largest producers of aluminium in the country, the company currently has organic growth projects worth over $1 billion in India. This includes setting up a 25,000 tonne battery foil plant in Sambalpur, Odisha, for which the company is investing Rs 800 crore.

    The flagship metals company of the Aditya Birla Group is also looking at the exploration of rare earth minerals, including lithium and nickel, its management indicated earlier this month.

    Novelis is the world's largest recycler of aluminium sheets and has a major presence in beverage packaging, automobiles and aerospace. It was acquired by Hindalco in 2007 for $6 billion, one of the largest purchases in the industry at the time.

    While the turnaround of Novelis took some time, the unit has been the mainstay of Hindalco's earnings for several years now, especially because of its presence in value-added products. That has also helped protect Hindalco's earnings from fluctuations in commodity prices.

    Novelis has a presence in nine countries in North America, South America, Europe and Asia with 33 manufacturing locations. It employs over 13,000 people.

    So far in FY24, Novelis' operating profit has accounted for three-fifths of Hindalco's consolidated earnings. In 2020, Novelis completed the acquisition of US-based Aleris Corp, which is a supplier of rolled aluminium products. Novelis announced its plan to go public in the US after the close of Indian market hours. Hindalco closed at Rs 511.60 on the NSE, down 0.1%.



    (You can now subscribe to our ETMarkets WhatsApp channel)

    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more

    (You can now subscribe to our ETMarkets WhatsApp channel)

    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in