Hindalco's U.S. Subsidiary Novelis To Go Public

Hindalco Industries Ltd.'s wholly owned American subsidiary, Novelis Inc., has filed confidentially for an initial public offering with the U.S. Securities and Exchange Commission.

Novelis, an aluminum solutions provider and a leader in aluminum rolling and recycling, has submitted a draft registration statement on Form F-1 with the SEC relating to the proposed IPO of its common shares, the company said in a news release on Tuesday. 

The common shares are expected to be offered by Novelis' sole shareholder—Hindalco. As a result, the proceeds of the IPO will go to the flagship company of the Aditya Birla Group and Novelis will not receive any proceeds from the sale of common shares.

Novelis expects to complete the public offering after the SEC finishes its review process, subject to market and other conditions.

Under the confidential route of IPO filing, the details and draft statement is shared with only the regulator and not to the public to keep the details private for a longer period of time.

Hindalco's plan to take Novelis public was revealed days after the company said that it will be bidding for critical minerals exploration sites being auctioned by India as the billionaire Kumar Mangalam Birla-owned company seeks materials for a green energy shift.

On Feb. 13, Hindalco Industries declined the most since May 2020 as multiple brokerages downgraded the stock after its arm Novelis reported a sharp escalation in capital expenditure.

Novelis Inc. upwardly revised the cost of its green field project, Bay Minette, to $4.1 billion. The revised project cost is 65% higher than the earlier estimate of $2.5 billion.

Apart from the cost overrun, the company has also delayed the project commissioning, which will now take place in the second half of the calendar year 2026.

Brokerage firm CLSA downgraded Hindalco shares to an 'underperform' rating, over the cost and time overrun for the Bay Minette project.

Hindalco acquired Novelis in 2007 in a $6 billion all-cash transaction, including debt. 

Shares of Hindalco have declined about 16% in 2024 so far on the BSE, as compared with a 1% rise in the benchmark Sensex. The metal stock has gained about 17% in a year's time.