Novelis files draft papers for IPO in US

Novelis Inc., the US subsidiary of the Aditya Birla group’s flagship metals firm, Hindalco Industries Ltd, has filed with the US regulator for an initial public offering (IPO).

The aluminum rolling and recycling giant said the IPO will be a secondary sale of shares, indicating that Novelis will not receive any proceeds from the sale of common shares by its sole shareholder.

Novelis “has confidentially submitted a draft registration statement on Form F-1 with the Securities and Exchange Commission relating to the proposed initial public offering of its common shares,” the company said in a press release.

In a confidential filing, details including the size of the share sale and the valuation are not revealed till the application is approved by the regulator.

Hindalco plans to raise $1 billion from the IPO and expects a valuation of $15 billion for the Georgia, Atlanta-based maker of aluminium products, CNBCTV18 reported, citing unidentified people aware of the developments.

The common shares are expected to be offered by Novelis’ sole shareholder, AV Minerals (Netherlands) N.V., a fully owned subsidiary of Hindalco Industries.

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

Shares of Hindalco rallied in early trade before ending almost flat at ₹511.90 apiece on Wednesday. The benchmark Sensex declined 0.6% to 72,623.09.

Novelis was founded in 2005 after being spun off from Alcan Inc., and was acquired by Hindalco in 2007, marking one of the largest overseas acquisitions by an Indian company.

The latest Hindalco earnings report showed that the US subsidiary had a net debt of ₹38,467 crore (about $4.6 billion) at the end of December 2023.