Home IPO Novelis, a Hindalco subsidiary, submits SEC filings for planned IPO in the US

Novelis, a Hindalco subsidiary, submits SEC filings for planned IPO in the US

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Novelis files SEC for anticipated US IPO.

Novelis Inc., a Hindalco subsidiary, has filed a draft registration statement with the US Securities and Exchange Commission (SEC) for a proposed IPO.

Hindalco Industries Ltd saw its shares rise by up to 5% on Wednesday as its US-based subsidiary, Novelis Inc, filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC). Trading at ₹522.65 apiece on the NSE, the stock was among the top gainers in the Nifty 50, up by 2.16%.

Novelis’ sole shareholder, AV Minerals (Netherlands), a 100% subsidiary of Hindalco Industries, is expected to offer the shares. Novelis won’t receive any proceeds from this sale. The company anticipates completing the public offering after SEC review, pending market conditions.

Novelis, known for its aluminum products used in various industries, plans to proceed with the public offering once the SEC review is done, pending market conditions. Hindalco Industries investors expressed worries over cost overruns at Novelis’ Bay Minette project.

 In February, Novelis disclosed a 65% rise in total capital costs and a one-year delay for the Bay Minette project, now estimated at $4.1 billion, with commissioning expected by late 2026 or the latter half of fiscal year 2027.

Hindalco Industries investors expressed concerns regarding the escalating costs and delay at Novelis’ Bay Minette project. In February, Novelis announced a 65% surge in total capital expenditures and a one-year postponement for the project, now valued at $4.1 billion, with commissioning expected by late 2026 or the latter part of fiscal year 2027.

As of the third quarter of fiscal year 2024, Novelis reported a net debt/EBITDA ratio of 2.7X, projected to remain relatively stable throughout FY2024-28, according to Kotak estimates.

The Atlanta-based company recorded a 23% quarter-on-quarter decrease in net profit, declining to $121 million from $174 million in the previous quarter. Quarterly revenue also dipped by 4% quarter-on-quarter and 6% year-on-year to $3.94 billion.

In the third quarter of fiscal year 2024, Novelis recorded adjusted EBITDA of $454 million, meeting analyst forecasts. The adjusted EBITDA per tonne stood at $499, impacted by reduced operating leverage sequentially due to seasonal factors and planned shutdowns.

In the fourth quarter of fiscal year 2024, management projects margins of approximately $525 per tonne, factoring in normalized volumes and a rebound in demand, particularly in the critical beverage can segment.

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