Hindalco's arm Novelis raises $750 million through share subscription with AV Minerals

Aditya Birla Group's metals arm Hindalco Industries Ltd on Monday (December 29) announced that its wholly owned subsidiary, Novelis Inc., has entered into a subscription agreement with AV Minerals (Netherlands) N.V., the sole shareholder of Novelis and a wholly owned subsidiary of Hindalco.

Under the agreement, AV Minerals has agreed to purchase 50,00,000 common shares of Novelis, with no par value, at a price of $150 per share, amounting to a total consideration of $750 million. The transaction has been formally filed by Novelis with the U.S. Securities and Exchange Commission through Form 8-K.

Last month, Satish Pai, Managing Director of Hindalco Industries expects 2026-27 (FY27) to be a strong year for its US subsidiary Novelis, which is targeting $500 per tonne earnings before interest, taxes, depreciation, and amortisation (EBITDA) as operations normalise after recent disruptions.

Also Read: Hindalco Industries shares fall 3% after reports of another fire at Novelis' Oswego plant

Speaking after Hindalco announced its July–September 2025 quarterly results on November 7, 2025, Pai said Novelis’ Oswego mill, affected by a fire earlier in the year, will restart in the first week of December, helping the fourth quarter deliver stronger results. “Q3 will be the quarter that takes the brunt of the Oswego fire… so Q4 Novelis will come back very strong,” he said. “We expect 2026-27 to be a very good year for Novelis."

He added that Novelis’ underlying business remains steady, and the company’s Bay Minette project in the US will play a key role in future growth. The project provides 600,000 tonnes of capacity, expandable to 1.2 million tonnes. “The US is the largest market, and because of the tariff environment, anybody trying to import into the US faces a lot of hurdles,” Pai explained. “This project is going to be highly accretive to Novelis going forward.”

Discussing costs, Pai said that the project’s budget rise was largely due to US inflation, but that it would still deliver returns above the cost of capital.

Shares of Hindalco Industries Ltd ended at ₹865.35, down by ₹7.55, or 0.86%, on the BSE.

Also Read: Hindalco's Novelis plant in New York catches fire, no injuries reported; Production halted