Novelis prepares to IPO in USA

Novelis Inc, the US subsidiary of Hindalco Industries, announced on Tuesday it has filed a draft registration statement with the US Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO).

The aluminium manufacturer has filed the registration statement on a confidential basis, it said in a regulatory update. The shares are likely to be offered by Novelis’ sole shareholder. The company is a wholly-owned subsidiary of Hindalco.

Novelis will not receive any proceeds from the sale of common shares by its sole shareholder. It expects to complete the public offering after the SEC completes its review process, subject to market and other conditions, it added, without providing any further details.
Last week, Novelis said it will spend $4.1 billion on the integrated rolling and recycling plant to be set up in Bay Minette in the US, 64% higher than $2.7-2.8 billion pegged earlier.

In a post-earnings call, Hindalco’s MD Satish Pai said that civil work accounted for about 80% of the increase, since it was estimated roughly earlier. However, the cost of the 600,000-tonne-per-annum project will reduce significantly from $7,000 a tonne to $1,500-2,500 a tonne in the second phase, when capacity is doubled, he added.

Novelis, an Atlanta-based company, had posted a net income (attributable to its common shareholder) of $121 million for Q3 of this fiscal, up significantly from the $12 million reported in the prior-year period. The net income, excluding special items was $174 million, rose 81%, while Ebitda rose 33% to $454 million.

On its part, Hindalco posted a 71.1% rise in consolidated net profit to Rs 2,331 crore for Q3, driven by a strong performance of its aluminium and copper businesses. In comparison, the Aditya Birla Group company had posted a net profit of Rs 1,362 crore.

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Novelis prepares to IPO in USA