Hindalco’s Novelis files draft papers to target $12.6 bn valuation via US IPO

The aluminum producer filed its draft papers with the US Securities and Exchange Commission (SEC) where it said that its parent company is targeting to raise up to $945 million by offering 45 million shares at a price range of $18 and $21 each. Hence, the IPO price band is estimated to be between $18 and $21, Novelis said in its filing with the US SEC.

Also Read: Hindalco posts 32% jump in Q4 profit on strong margin, volumes

Billionaire Kumar Mangalam Birla-owned Hindalco is one of India’s biggest aluminium manufacturing company and the world’s largest flat-rolled products player and recycler of aluminium.  After Novelis IPO, the Aditya Birla Group company will own about 92.5 per cent of the US-based company. Novelis will list on the New York Stock Exchange (NYSE) under the symbol “NVL”.

‘’Following the IPO, Hindalco whose wholly owned subsidiary, AV Minerals (Netherlands) NV (the ‘selling shareholder’), is our existing sole shareholder, will beneficially own approximately 92.5 per cent of our outstanding share capital,” said Novelis in its exchange filing.

‘’Hindalco will control approximately 92.5 per cent of the voting power of our outstanding share capital following the offering, assuming no exercise of the underwriters’ option to purchase additional shares. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the NYSE,” added Novelis.

Morgan Stanley, BofA Securities and Citigroup Global Markets are the joint book-running managers for the proposed IPO, with Wells Fargo Securities, Deutsche Bank Securities and BMO Capital Markets acting as additional book-running managers. BNP Praibas, Academy Securities, Credit Agricole CIB, PNC Capital Markets LLC and SMBC Nikko will be co-managers for the issue.

“We are a ‘foreign private issuer’ under applicable Securities and Exchange Commission rules, and as a result, will be subject to reduced public company reporting requirements for this prospectus and future filings with the Securities and Exchange Commission,” said Novelis in its exchange filing.

Headquartered in Atlanta, Georgia, Novelis is the leading producer of flat-rolled aluminum products and the world’s largest recycler of aluminum. Novelis was delisted from the US stock exchange in 2007 after Hindalco acquired it.

The US IPO market has shown positive indications of a turnaround in 2024, after two sub par years, on hopes of rate cuts in the second half of the year and a soft landing for the economy, according to news agency Reuters.
 

Hindalco Q4 Results

The flagship company of the Aditya Birla group reported a 32 per cent year-on-year jump in its consolidated net profit to ₹3,174 crore for the quarter ended March driven by strong margins and volumes across aluminium and copper businesses. The base metals major’s revenue from operations for the quarter was flat year-on-year at ₹55,994 crore.

Hindalco’s earnings before interest, taxes, depreciation, and amortization or Ebitda stood at ₹7,201 crore for Q4FY24, up 24 per cent, driven by lower input costs and higher volumes. The demand for copper and aluminium going ahead remains very strong in India, said Satish Pai, managing director, Hindalco Industries.

“I think that we can get to the monsoon where we don’t have supply disruptions, so, our cost of production is under control and if the commodity prices remain favorable, we should have another good year,” Pai said in a statement. On Tuesday, May 28, shares of Hindalco settled 0.41 per cent to ₹680.55 apiece on the BSE.

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Published: 28 May 2024, 05:49 PM IST