An aluminium company from the Aditya Birla Group is going to make it to the US IPO. Novelis is a Hindalco-owned company that will be the first conglomerate from India to sell common shares to the public in the US market. However, the Group made its international listing debut in Birla Carbon, Thailand, in 1990 with a cap of $485 million.
Inclusion in Birla Group
Hindalco acquired Novelis when listed on the Toronto Stock Exchange in NYSE. It cost the Aditya Birla Group $6 million in 2007 and was considered one of the biggest cross-border transactions. Novelis brought a great value addition of 60% in revenues and operating profit to its parent company. With Birla’s ownership, the company has made a sizeable contribution by providing an operating profit of $1.8 billion and fiscal revenue of $19 billion in 2023.
About the Deal
The size of the market cap for Novelis isn’t revealed to the public and seems to be a confidential IPO entry. The parent company, however, will remain the sole shareholder, while Novelis will not receive any money from this listing, according to the buzz around the launch. The regulator for US securities will review the Novelis IPO document. Rules state in US exchanges that the company has to be first listed in India before applying in US markets previously absent during the dotcom boom. The Indian government had in November 2023 made provision for Indian businesses to get direct listing overseas with GIFT IFSC.
Market analysts predict that the Novelis IPO listing will help raise capital, enabling it to fund various projects required for strategic expansions without equity dilution at its level.