Hindalco Stock Eyes Rebound on Novelis IPO Buzz

21 Feb 2024 , 08:37 AM

On February 21, Hindalco shares may witness a potential rebound following news of its US subsidiary Novelis filing for an initial public offering (IPO) with the Securities and Exchange Commission. The IPO is expected to be offered by Novelis’ sole shareholder AV Minerals (Netherlands), a wholly-owned subsidiary of Hindalco.

Details about the IPO remain scarce as the draft registration statement has been filed confidentially.

Hindalco’s shares have faced downward pressure after Novelis announced a delay in completion and increased capital for the Bay Minette project. Since the announcement by Novelis on February 13, Hindalco shares have witnessed a 12% decline.

Closing flat at ₹512 on February 20, Hindalco shares maintained stability amidst market volatility, even as the Nifty reached a new record high.

Novelis revealed that the capital cost of the Bay Minette project has surged by 65% to $4.1 billion. The completion of the project is now anticipated by the end of CY2026 or the second half of FY27. Additionally, the management acknowledged that the revision will lower returns from ‘mid-teens’ to ‘double digits’.