Hindalco Industries Ltd said its wholly owned subsidiary Novelis Inc. has entered into a loan agreement for the issuance of $100 million in municipal bonds and has also amended its existing term loan agreement.
The company informed stock exchanges of the financing move, which comes as Novelis steps up efforts to strengthen its balance sheet and fund ongoing growth projects.
Novelis -- the world’s largest recycler of aluminium -- is currently building a new rolling and recycling plant at Bay Minette, Alabama, to meet rising demand for aluminium beverage packaging sheet. It is also expanding capacity across other geographies to capture growth opportunities in the automotive and packaging sectors.
However, the company has been contending with cost pressures and margin headwinds. In its first-quarter results for FY26, Novelis reported a 13 percent year-on-year rise in revenue to $4.7 billion, but net income attributable to shareholders fell 36 percent to $96 million, while adjusted EBITDA declined 17 percent to $416 million. The management cited higher aluminium scrap costs, an unfavourable product mix, and the impact of tariffs as key drags on profitability.
Novelis has also launched a cash tender offer to buy back its 3.250 percent senior notes due November 2026, in line with efforts to optimise its debt structure. Softer earnings at the subsidiary had weighed on Hindalco’s stock earlier this year, though the parent has maintained strong consolidated financial performance on the back of its India aluminium and copper operations.
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