Novelis Inc. Eyes Valuation of Up to $12.6 Billion in U.S. IPO

Novelis Inc., a subsidiary of Aditya Birla Group’s metals flagship Hindalco, is gearing up for its initial public offering in the United States with an eye-popping valuation of up to $12.6 billion.

The aluminum recycler is aiming to raise up to $945 million by offering 45 million shares at a price range of $18 to $21 each. Once listed on the New York Stock Exchange under the symbol “NVL”, Novelis will solidify its position as a leading aluminum solutions provider and the world leader in aluminum rolling and recycling.

According to a regulatory filing by Hindalco, Novelis expects the selling shareholder to grant the underwriters an option to purchase up to an additional 6,750,000 common shares to cover over-allotments, if any, for 30 days after the date of the final prospectus. However, Novelis will not receive any proceeds from the sale of common shares by its sole shareholder.

After the completion of the IPO, a wholly owned subsidiary of Hindalco will retain ownership of 555,000,000 shares of Novelis’ common shares, representing 92.5% of Novelis’ total outstanding common shares (or 91.4% if the underwriters exercise in full their over-allotment option).

Morgan Stanley, BofA Securities, and Citigroup are acting as lead book-running managers for the proposed offering, with Wells Fargo Securities, Deutsche Bank Securities, and BMO Capital Markets serving as additional book-running managers.

Hindalco, the parent company of Novelis, reported a 32% rise in its consolidated net profit for the quarter ended March, driven by improved margins across all business segments. For the full fiscal year 2023-24, profit increased by 1% to ₹10,155 crore.

Overall, Hindalco reported strong financial results, with consolidated revenue for the fourth quarter standing at ₹55,994 crore, up 6% quarter-on-quarter. The company’s EBITDA for the same period was ₹7,201 crore, up 24% year over year.

Novelis, specifically, reported revenue of $4.1 billion in the fourth quarter of fiscal year 2023-24, with net income from continuing operations reaching $179 million, up 2% year over year.

Hindalco’s copper business also saw impressive growth, with quarterly revenue reaching ₹13,424 crore, up 20% year over year. The company’s copper EBITDA hit an all-time high of ₹776 crore, up 30%, driven by record sales.

Overall, Hindalco Industries’ managing director, Satish Pai, expressed optimism about the company’s performance, highlighting the strong results across its various business segments. Pai emphasized the company’s focus on enhancing the downstream segment and the promising sales trajectory of Novelis.

With Novelis’ IPO on the horizon and strong financial performance across the board, Hindalco and its subsidiaries are poised for continued success in the global aluminum market.