Hindalco shares rise: During Wednesday’s trading session on the BSE, Hindalco’s shares climbed 2% to a peak of Rs 695 for the day, spurred by its subsidiary, Novelis, filing to offer 45 million shares in its US IPO, priced between $18 to $21 per share.
Hindalco’s shares surged 2% on BSE on Wednesday, reaching a high of Rs 695, following its subsidiary Novelis filing to offer 45 million shares in the US IPO priced between $18-21 per share.
Hindalco Industries Ltd. shares led the Nifty50 gainers list on Wednesday (May 29) as the Aditya Birla Group announced plans to list its US-based aluminium products company, Novelis, on the New York Stock Exchange (NYSE). The offering consists of 45 million shares, representing a 7.5% stake in the company, priced at $18-21 per share.
At 10:15 am, the stock on the NSE was at ₹686.40, up 0.75% from the previous session’s close. Hindalco shares have surged over 30% in the past six months and are up 12% year-to-date.
Hindalco Industries’ shares rose by as much as 3% on May 29, in response to the announcement of its US subsidiary Novelis’ IPO on the New York Stock Exchange (NYSE). The Aditya Birla Group intends to list 45 million Novelis shares, priced at $18-$21 each, as a strategic move to leverage the robust US equity market and promising business opportunities.
Hindalco Shares Rise Amid Novelis IPO Announcement
The IPO has the potential to yield significant proceeds for Hindalco, ranging from $810 million to $945 million, possibly reaching $1.08 billion with the green shoe option. It aligns with Hindalco’s overarching strategy to unlock value and raise capital via its global subsidiary.
Novelis’ IPO, aiming for a valuation of up to $12.6 billion, is pivotal for Hindalco. The offering will entail a 7.5% reduction in Hindalco’s stake in Novelis, leaving it with around 92.5% ownership post-IPO. This move underscores the company’s faith in Novelis’ market prospects while bolstering Hindalco’s finances through its subsidiary’s strong valuation.
AV Minerals (Netherlands), a wholly-owned subsidiary of Hindalco, will offer the shares. Notably, Novelis will not gain proceeds from the IPO; instead, all funds will go to Hindalco, enabling the parent company to directly benefit from the capital infusion.
Novelis’ enterprise valuation ranges from $15.2 billion to $17 billion, considering a net debt of $4.35 billion per the F1 filing with the SEC. Morgan Stanley, BofA Securities, and Citigroup are serving as joint book-running managers for the IPO, with additional backing from Wells Fargo Securities, Deutsche Bank Securities, and BMO Capital Markets.
The IPO announcement spurred a positive market response, propelling Hindalco’s stock over 2% to Rs 698.80 per share on the NSE during mid-day trading. This rise reflects a broader uptrend, with Hindalco shares appreciating nearly 65% in the past year. Analysts are optimistic about Novelis’ IPO, citing favorable conditions in the US equity markets and Novelis’ strong operational performance. Prabhudas Lilladher brokerage maintained its ‘buy’ rating on Hindalco, highlighting Novelis’ improving performance and positive outlook for Hindalco’s India business.
Acquired by Hindalco for $6 billion in 2007, Novelis has emerged as a key player in the global aluminium market, specializing in flat-rolled aluminium products for various industries. This acquisition has notably expanded Hindalco’s global presence and product range. The choice to list Novelis on the NYSE reflects Hindalco’s strategic vision of extracting value from its overseas ventures. By tapping into the US capital markets, Hindalco seeks to boost Novelis’ visibility and valuation, capitalizing on its robust performance and growth prospects.
Novelis’ impending IPO represents a notable achievement for Hindalco Industries, showcasing the Aditya Birla Group’s adeptness in overseeing and expanding its global holdings while underlining Novelis’ financial robustness and market trust. As Hindalco readies to capitalize on this IPO, it paves the way for continued expansion and value addition within the global aluminium sector. Investors and observers will closely monitor the IPO’s developments, anticipating its influence on Hindalco’s financial results and market worth.
You might also be interested in – HPCL will deliberate on issuing bonus shares on Thursday, contemplating such an issuance for the first time in nearly 8 years.
