Hindalco Industries Limited (BSE:500440) has decided to take its US subsidiary Novelis Inc. public, 17 years after the Aditya Birla group snapped up the top aluminium maker that now fetches over half of its revenue. In a surprise announcement on February 20, 2024, Novelis said it has submitted a confidential filing for an initial public offering (IPO) with the US Securities and Exchange Commission (SEC). The IPO will be a secondary sale of shares by Hindalco, meaning Novelis will not receive any capital as part of the offer.

Hindalco holds 100% of Novelis. Under a confidential IPO filing, the applicant submits information to the regulator alone, which is kept under wraps until the application is approved. Novelis did not disclose the size of the offer or the valuation it will seek.

Analysts tracking Hindalco pointed out that it is a reasonably good time to go public in the US, with the Federal Reserve indicating an end to interest rate hikes. It is not immediately clear what Hindalco plans to do with the IPO proceeds and whether it will choose to give out some of it as dividends. The Hindalco stock is yet to fully recover since.

It closed at INR 511.8 on the BSE on February 20, 2024, down 0.14%, while the benchmark Sensex index gained 0.48%. The Novelis IPO announcement came after market hours.