Hindalco Industries’ shares jumped more than 5% on Wednesday after the Aditya Birla Group metals company announced that its US-based arm, Novelis Inc., filed for an initial public offering (IPO) with the Securities and Exchange Commission (SEC). 

Hindalco shares hit an intraday high of Rs 538, 5.16% higher than its previous closing form on the National Stock Exchange (NSE). At 12:30 pm, the stock was trading 1.65% higher at Rs 520.05.

In an exchange filing on Tuesday, Novelis informed that it has confidentially filed a draft registration statement on form F-1 with the US SEC relating to the proposed IPO. The public offering is expected to be completed as soon as the SEC completes its review process, subject to market and other conditions.

Novelis would not receive any proceeds from the sale of common shares as they would be offered by its sole shareholder, AV Minerals (Netherlands), a wholly-owned subsidiary of Hindalco. However, Hindalco’s plans on how to utilise the proceeds remain unclear. 

Since the registration has been filed confidentially, the information is submitted solely to the regulator, and no other details about the IPO have been made public. 

Hindalco acquired Novelis in 2007, positioning itself as a global player in the aluminium industry. Today, Novelis constitutes a substantial portion of Hindalco’s consolidated revenue and profits, nearly 60% in the first nine months of FY24.