Hindalco Subsidiary Novelis Raises $750 Million Through Share Subscription

30 Dec 2025 , 12:35 PM

Aditya Birla Group’s metals arm Hindalco Industries Ltd on December 29 said its wholly owned subsidiary Novelis Inc has entered into a subscription agreement with AV Minerals Netherlands NV, which is the sole shareholder of Novelis and a wholly owned subsidiary of Hindalco.

Under the agreement, AV Minerals has agreed to subscribe to 50,00,000 common shares of Novelis with no par value at a price of $150 per share. The total consideration for the transaction amounts to $750 million, strengthening the capital base of Novelis and supporting its long term growth plans.

Novelis has formally filed details of the transaction with the United States Securities and Exchange Commission through a Form 8 K filing, Hindalco said. Last month, Hindalco Managing Director Satish Pai said the financial year 2026 27 is expected to be a strong year for Novelis as its operations normalise following recent disruptions.

Pai said Novelis is targeting earnings before interest, taxes, depreciation and amortisation of around $500 per tonne as operational stability improves across its facilities. Speaking after Hindalco announced its July to September 2025 quarterly results on November 7, Pai said Novelis’ Oswego mill in the US, which was impacted by a fire earlier in the year, is expected to restart in the first week of December.

He said the third quarter would bear the impact of the Oswego fire, while the fourth quarter is expected to deliver significantly stronger performance for Novelis. Pai added that Novelis’ core business fundamentals remain steady and that the Bay Minette project in the United States will be a key driver of future growth.

The Bay Minette project will add 600,000 tonnes of capacity initially, with the potential to expand capacity to 1.2 million tonnes over time.

He highlighted that the US remains the largest market for Novelis and noted that the prevailing tariff environment makes imports into the country challenging, supporting the strategic importance of domestic capacity expansion. Pai said the Bay Minette project is expected to be highly accretive to Novelis over the long term and will strengthen its competitive position in the US market.

On project costs, he said the increase in the project budget was largely due to inflationary pressures in the US, but added that the investment is still expected to generate returns above the cost of capital.

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