Hindalco Ind gains 5% on report of Novelis Inc's likely IPO in US

Shares of Hindalco Industries climbed 4.6 per cent to Rs 536 apiece on the BSE in Wednesday's intraday trade after its wholly-owned subsidiary, Novelis Inc, submitted a draft registration statement with the Securities and Exchange Commission (SEC) of the United States for an initial public offering (IPO).

At 10:32 AM, shares of the Aditya Birla group company was ruling 1.8 per cent higher at Rs 521 per share as against 7-point, or 0.01 per cent, dip in the benchmark index. 

On successful completion of its IPO, Novelis will be among the few subsidiaries of Indian companies to be listed separately on foreign bourses. While common shares are expected to be offered by Novelis' shareholders, Novelis will not receive any proceeds from the sale of common shares by its sole shareholder.    

"Novelis expects to complete the public offering after the SEC completes its review process, subject to market and other conditions," the statement said.

Hindalco had acquired Novelis in 2007 for $6 billion. Later in 2020, Novelis acquired Aleris Corp, a US-based firm, at an enterprise valuation of $2.8 billion.

According to a Business Standard report, analysts at Centrum Broking had arrived at a market cap of Rs 80,121 crore for Novelis in May 2023, translating into about $9.7 billion at current INR/$ rate of 82.90.

In the first nine months of FY24, Novelis accounted for 62.7 per cent of Hindalco's consolidated revenue of Rs 1.6 trillion, down marginally from its 65.4 per cent share in FY23.

Novelis reported Rs 1 trillion in revenue in the first nine months of FY24, compared to its full-year revenue of Rs 1.48 trillion in FY23. 

Similarly, Novelis accounted for 56.3 per cent of Hindalco’s consolidated profit before interest and taxes (PBIT) in 9MFY24 worth Rs 19,950 crore, similar to its share in FY23. READ MORE