Novelis seeks $945 million in US IPO by offering 45 million shares for $18-21 each

Novelis Inc., an American industrial aluminium company and an independent subsidiary of Hindalco Industries Limited, reportedly aims to raise $945 million in a US IPO by selling 45 million shares for $18-21 each.

This IPO may even generate $1.08 billion of capital for Novelis if the green shoe option is exercised. This IPO listing is part of Hindalco's broader strategy to unlock value and raise capital through all its global subsidiaries.

After the initial public offering, Hindalco will reduce its stake in Novelis by 7.5 per cent and retain almost 92.5 per cent of the ownership.

Novelis stated: "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."

Through this IPO, Hindalco targets to achieve a market valuation of nearly $12.6 billion. Hindalco will list Novelis on the New York Stock Exchange (NYSE) under the symbol "NVL".

The shares will be offered by AV Minerals (Netherlands), a wholly-owned subsidiary of Hindalco. All funds will be directly credited to Hindalco instead of Novelis, allowing the parent company to benefit from the capital influx.

Novelis is the world's largest aluminium recycler and the biggest producer of flat-rolled aluminium products. The filing shows that Hindalco bought Novelis in 2007 at a valuation of about $6 billion, including debt.

At the end of FY2024, Hindalco revealed that it earned a profit after tax (PAT) of INR 10,155 crore, up 1 per cent from INR 10,097 crore a year ago.