homebusiness Newscompanies NewsExclusive | Hindalco expects $15 billion valuation for Novelis in a billion dollar IPO
Exclusive | Hindalco expects $15 billion valuation for Novelis in a billion dollar IPO
Novelis will be the largest overseas listing of a company owned by an Indian entity. The current record is held by Bharti Group’s Airtel Africa, which raised about $750 million via an IPO and listed on the UK stock exchanges with a market capitalisation of $4.68 billion in June 2019.
The Aditya Birla Group has started the process to list Novelis in the US. The group's flagship entity, Hindalco, expects a valuation of $15 billion for the Georgia, Atlanta-based maker of aluminium products, sources told CNBC-TV18.
Hindalco share price chart for the last one yearHindalco plans to raise a billion dollars by selling Novelis shares through an initial public offering (IPO).
There will be no issue of fresh shares by the Kumar Mangalam Birla-owned company, according to a confidential submission of draft registration with the Securities and Exchange Commission, the US market regulator, made by Novelis.
FILE PHOTO: Kumar Mangalam Birla is the fourth-generation chief of the $65 billion Aditya Birla Group. Kumar Mangalam Birla's own net worth is estimated at nearly $20 billion by Forbes on Febraury 21."Novelis will not receive any proceeds from the sale of common shares by its sole shareholder," the submission said.
The submission, which is subject to review by the SEC, would allow the company to initiate roadshows and meet potential investors.
"Timing of the IPO will depend on market conditions and investor appetite. Roadshows will give the company the ability to gauge the market appetite at their expected valuation," a source told CNBC-TV18.
Also Watch | If Novelis Gets Listed In The US, There's No Point Buying Hindalco: Nuvama Institutional Equities
Hindalco has not commented on CNBC-TV18's queries related to the proposed IPO from Novelis. "Value unlocking of Novelis and fundraising will strengthen Hindalco's ability to comfortably meet additional capex requirements," an expert with direct knowledge pointed out.
Recently, Hindalco said that Novelis will spend $4.1 billion to set up the integrated rolling and recycling plant at Bay Minette in the US.
The latest proposal for capital expenditure on the Bay Minette plant is significantly higher than the previously announced $2.7-$2.8 billion. The significant escalation in cost dragged the shares of Hindalco down as investors feared lower returns.
Hindalco acquired Novelis in 2007 and delisted it from the exchanges in the US.
First Published: Feb 21, 2024 9:01 AM IST
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