Hindalco surges 5 per cent on Novelis' March quarter results, JV

NEW DELHI: Shares of Hindalco jumped nearly 5 per cent in Thursday’s trade after the aluminium maker’s subsidiary Novelis Inc, an overseas subsidiary of Hindalco Industries, announced 46 per cent jump in net income at $73 million for the March quarter.

Besides, the arm entered into a joint venture with Kobe Steel, a Japanese producer of aluminium rolled products. The JV will be named Ulsan Aluminium and will be formed by Novelis selling 50 per cent of its ownership stake in its Ulsan facility in South Korea to Kobe for $315 million.

Following the development, shares of the parent company rose 4.65 per cent to hit a high of Rs. 195.80 on BSE.

The transaction related to the newly-formed JV is expected to be closed by September this year subject to customary closing conditions, the ET reported

The partnership is strategic as it will aide in better utilisation of the Ulsan facility as well as serve the increasing demand for lightweight rolled aluminium products across Asia which is emerging as a manufacturing hub for the global automobile industry. The transaction will also help Novelis reduce its net debt by generating cash flows, the ET report noted.