Novelis IPO Shelved For Now, Relaunch Unlikely Till At Least 2026
Novelis, in June last year, had postponed a $945 million US markets debut due to market conditions.
Billionaire Kumar Mangalam Birla's US-based aluminum producer Novelis Inc. will not have another go at an initial public offering for at least one more year, amid valuation concerns, a senior executive aware of the matter said. The executive spoke on conditions of anonymity.
The Hindalco Industries Ltd. subsidiary is likely to wait out the downturn in global markets and see how economic changes rolling out from the Donald Trump-led White House affect pricing and demand, the above-mentioned executive added.
In an interview with Bloomberg Television in August 2024, Hindalco's Managing Director Satish Pai had said that any next attempt on the IPO will only be in 2025. Then in February, he told Bloomberg that the company was prioritising the completion of its greenfield Bay Minette project before an IPO.
Novelis, in June last year, had postponed a $945 million US markets debut due to market conditions. In a statement, it had also said that it would continue evaluating the timing of the offering
The executive said that the Atlanta-based metal maker was promised a valuation of around $13 billion the first time it went for an IPO. Underlying market conditions failed to fetch that figure back then and the firm was not looking to take a risk and relaunch the IPO amid global volatility.
Novelis is the world’s biggest maker of flat-rolled aluminum products and is also the largest aluminum recycler, operating 14 scrap-processing plants across four continents.
The IPO would have seen a sale of 4.5 crore shares in the $18-21 range. Hindalco would have owned about 92.5% of the company post the offer. Morgan Stanley, Wells Fargo & Co., Deutsche Bank AG and the Bank of Montreal, Bank of America Corp., Citigroup Inc. were the bankers handling the deal.
In fiscal 2024, Novelis accounted for 61% of Hindalco's revenue and 56% of the company's Ebitda.
For the third quarter of fiscal 2025, Novelis reported a 9% year-on-year fall in net profit to $110 million. Excluding one-time cost of $5 million due to flooding and rainfall at its Switzerland plant, the net income fell 32% on an annual basis. The company said it expected capex during the financial year to be on the low end of a range of $1.8 billion to $2.1 billion.
NDTV Profit has reached out to a representative from the Aditya Birla Group for comments.
