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Birla Plans BIG! Targets USD 1.2 Billion From Hindalco Subsidiary IPO On US Exchanges - Check Details

Hindalco is considering listing Novelis in New York, pending necessary approvals from the US Securities and Exchange Commission (SEC).

Times Now Digital

Updated May 9, 2024, 07:17 IST

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Birla Plans BIG! Targets USD 1.2 Billion From Hindalco Subsidiary IPO On US Exchanges - Check Details (image source: Times Now Digital)

Kumar Mangalam Birla head of Aditya group-owned subsidiary Hindalco Industries is contemplating a substantial initial public offering (IPO) of Novelis, an independent prominent US aluminium products manufacturing subsidiary of Hindalco, according to a Bloomberg report.

Hindalco Industries is eyeing a fundraising target of approximately USD 1.2 billion for Novelis, If realized, this IPO could stand as one of the most substantial share sales of the year.

The valuation objectives for this ambitious IPO are aimed high. Hindalco may aim for a valuation of approximately USD 18 billion for Novelis, positioning the Atlanta-based company as a substantial player in the global market.

With a strategic eye on the market, Hindalco is considering listing Novelis in New York, pending necessary approvals from the US Securities and Exchange Commission (SEC). The tentative timeline for this endeavour points toward a potential listing by September, adding to the anticipation surrounding this financial move.

Novelis: A Titan in Aluminum Production

Novelis holds the esteemed position of being the world's largest producer of flat-rolled aluminium products. These products serve as crucial components across various industries, from automotive manufacturing to the packaging of everyday consumer goods such as soda cans.

In a testament to its strategic planning, Novelis in February confidentially filed for the IPO with the US Securities and Exchange Commission. This move underscores the company's preparedness and strategic foresight in navigating the complexities of the financial markets.

While deliberations are underway, it's essential to note the fluid nature of the situation. Details regarding the fundraising endeavour, including the targeted size, remain subject to change based on various factors and considerations.

Despite the significant momentum behind the IPO plans, there exists the possibility that Novelis may opt out of proceeding with the IPO altogether. This decision would likely stem from a thorough evaluation of market conditions and strategic priorities.

Hindalco's acquisition of Novelis in 2007 marked a significant milestone in the company's trajectory. The multibillion-dollar deal reshaped Hindalco's footprint in the global aluminium industry, positioning it as a major player on the international stage.

The US-based Novelis unit has emerged as a substantial contributor to Hindalco's revenue stream. In the last financial year, it accounted for over 60 per cent of the Indian company's total revenue, underscoring the strategic importance of Novelis within Hindalco's broader business portfolio.

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