Novelis IPO: Aditya Birla group subsidiary files for $945 million; check price band and other key details

Novelis IPO: Aditya Birla Group firm Hindalco Ltd is in focus on Wednesday after the company informed the stock exchanges in a filing on May 28 about the launch of a roadshow for the IPO (Initial Public Offering) of its United States subsidiary Novelis.

The company said that Novelis Inc plans to raise nearly $945 million via the IPO with an estimated valuation of $12.6 billion. The company has also announced the price band for the IPO.

Here are the key details of the proposed public issue of Novelis.

Novelis IPO price band and offer size

The price band for Novelis shares is estimated to be between $18 and $21 per share. The company has applied to list its shares on the New York Stock Exchange under the symbol “NVL”.

Hindalco currently owns 100% of Novelis through AV Minerals (Netherlands) NV. After the public issue concludes, the Aditya Birla group firm’s stake in Novelis will be reduced to around 92%.

Hindalco subsidiary AV Minerals will sell around 45 million shares through the public offer.

The sole shareholder of Novelis is likely to receive nearly $810- $945 million in the form of proceeds from the IPO, according to reports.

Reports also suggest that if the greenshoe option is used the proceeds could range from $931.5 million to $1.08 billion. The equity valuation of the company is likely to be in the range of $10.8 billion to $12.6 billion, and the total valuation of the company could range from $15.2 billion to $17 billion, a few reports suggested.

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About Novelis Inc

Novelis is a subsidiary of Hindalco Industries Limited, a leading aluminium and copper manufacturing company owned by the Aditya Birla Group. Novelis operates in a network of technically advanced rolling and recycling facilities located across North America, South America, Europe and Asia.

The company’s consolidated net sales fell 7% to $4,077 million in the March quarter of FY24 compared to $4,397 million in the corresponding quarter of the previous fiscal. The company’s net sales for FY24 fell more than 12% to $16,210 million compared to $18,486 million in the preceding fiscal.

The company’s net income for the March quarter improved by more than 6% to $166 million compared to $156 million in the same quarter of the preceding fiscal. The company’s net income for FY24 declined nearly 9% to $600 million against $659 million in FY23.

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