Hindalco’s Subsidiary Novelis Takes Flight: Global Aluminum Leader Announces US IPO

Novelis Inc., a leading global provider of sustainable aluminium solutions, announced a significant step towards strengthening its financial independence. A wholly-owned subsidiary of Hindalco Industries Limited, Novelis is launching a roadshow to introduce its initial public offering (IPO) to potential investors.

Offering Details and Potential Benefits

The IPO will involve the sale of 45 million common shares held by Novelis’ sole shareholder, a wholly-owned subsidiary of Hindalco Industries. Additionally, Novelis anticipates granting the underwriters an over-allotment option to purchase up to an additional 6.75 million common shares, providing flexibility in the offering process. The estimated price range for each common share is between $18.00 and $21.00.

Following the successful completion of the IPO, Novelis will list its common shares on the prestigious New York Stock Exchange (NYSE) under the symbol “NVL.” While Hindalco Industries will not receive any direct proceeds from the offering, it will retain ownership of approximately 555 million common shares, representing a 92.5% stake in Novelis.

A Team of Industry Leaders Guiding the Offering

Novelis has secured the expertise of leading financial institutions to manage the IPO process. Morgan Stanley, BofA Securities, and Citigroup will act as lead book-running managers, with additional support from Wells Fargo Securities, Deutsche Bank Securities, and BMO Capital Markets. BNP Paribas, Academy Securities, Credit Agricole CIB, PNC Capital Markets LLC, and SMBC Nikko will further bolster the offering as co-managers.

Novelis’ IPO signifies a strategic move towards greater financial autonomy and market visibility. This initiative positions them to capitalise on future growth opportunities within the sustainable aluminium solutions industry.

Due to strong performance and higher margins in every business category, Hindalco announced earlier this month a combined quarterly Net Profit of ₹3,174 crore, a 32% YoY increase.

With EBITDA per tonne of $540, up 25% YoY, Novelis posted a solid fourth-quarter performance. In Q4, Copper Business set a new milestone for performance, with record revenues and an all-time high EBITDA of ₹776 crore, up 30% YoY.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.