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Business News/ Markets / Stock Markets/  Novelis IPO: Kumar Mangalam Birla’s Hindalco Industries eyes $1.2 billion IPO for its US subsidiary
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Novelis IPO: Kumar Mangalam Birla’s Hindalco Industries eyes $1.2 billion IPO for its US subsidiary

Hindalco considers $1.2 billion IPO for Novelis, the top flat-rolled aluminium manufacturer globally, targeting $18 billion valuation. Novelis plans NYSE listing by September pending SEC approval.

Hindalco Industries mulls $1.2 billion IPO for Novelis, targeting $18 billion valuation. Plans to list on NYSE by September subject to SEC approval. AFP PHOTO/ Deshakalyan CHOWDHURYPremium
Hindalco Industries mulls $1.2 billion IPO for Novelis, targeting $18 billion valuation. Plans to list on NYSE by September subject to SEC approval. AFP PHOTO/ Deshakalyan CHOWDHURY

Hindalco Industries, the company run by Indian billionaire Kumar Mangalam Birla, is considering seeking about  $1.2 billion in Novelis, its US-based division's initial public offering (IPO), Bloomberg news reported.

Novelis is the world's biggest manufacturer of flat-rolled aluminium products, which are used in many different goods, such as cars and pop cans.

Bloomberg reported that Hindalco may aim for a $18 billion value for Atlanta-based Novelis, citing sources familiar with the matter.

The Indian group may try to list Novelis on the New York Stock Exchange by September, subject to US Securities and Exchange Commission permission, the report said.

Also Read: Hindalco takes its crown jewel to the public

Novelis reported in February that it has submitted a confidential application to the SEC for listing, according to the Bloomberg report.

Discussions are still underway and the specifics of the fundraiser, including its magnitude, may alter, reported Bloomberg, citing its sources. The manufacturer of aluminium goods may yet choose not to move through with an IPO, the report said. 

According to Bloomberg news report, a Hindalco official declined to comment.In 2007, Hindalco made a multibillion-dollar acquisition of Novelis. In the previous fiscal year, the US division accounted for almost 60% of the revenue generated by the Indian firm. The report added that under the proposed sale, a Hindalco unit will offer the shares, and Novelis will not get any of the proceeds.

Bloomberg News has reported that banks working on the Novelis IPO include Bank of America Corp. and Citigroup Inc.

Also Read: Hindalco Industries share price declines 14% post Novelis Q3 results: Capex enhancement leads to disappointment

According to news report, on Monday, May 6, Novelis announced its March quarter results. The aluminium products firm saw a 6% rise in earnings to $166 million over the same time last year. Nonetheless, there has been a 9% decrease in earnings throughout the full year.

Because of the drop in the average price of aluminum, the company's income has decreased by 7% to $4.1 billion. The business did clarify that the increase in shipments made up for some of the pricing decrease. Due in part to a rise in the demand for beverage packaging sheets, total exports of flat-rolled products grew by 2% to 951 kilo tons in the March quarter of last year.

Also Read: Hindalco shares jump 5% after Novelis files for IPO in the US

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 08 May 2024, 04:22 PM IST
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