Hindalco Industries aims to raise $945 million through the Novelis US IPO

Hindalco Industries, a subsidiary of Aditya Birla Group, plans to list Novelis on the NYSE by selling 45 million shares priced between $18 and $21 each. According to public disclosures made on Tuesday, this accounts for 7.5% of Hindalco's present ownership in the company.

Novelis’ IPO has the potential to create earnings of up to $945 million for Hindalco Industries through the offer for sale. Novelis is estimated to be worth as much as $12.6 billion at the range mentioned. Hindalco purchased Novelis in a transaction that valued it at $6 billion in 2007.

According to a source familiar with the situation, if the greenshoe option is utilized, the earnings could potentially reach $1.08 billion at the top of the price range. According to the filing with the US Securities and Exchange Commission (SEC), the company's enterprise valuation is estimated to be between $15.2 billion and $17 billion, based on a net debt of $4.35 billion.

Novelis announced on Tuesday that it has started a roadshow for the initial public offering of 45 million common shares owned by its sole shareholder, Hindalco. This will decrease Hindalco's ownership in the company to 92.5 per cent.

In February, Novelis declared intentions to seek a US market listing, with only Hindalco Industries offering the common shares as the main promoter. At present, Novelis is fully owned by Hindalco Industries, making it the only recipient of the proceeds up to $945 million.