Hindalco Surges 3% on ₹21,000 Crore Odisha Smelter Plan

Introduction

Shares of Hindalco Industries, the metals flagship of the Aditya Birla Group, gained over 3% on Thursday after the company announced a significant expansion of its aluminium operations in Odisha. The investment includes a ₹21,000 crore plan to expand its smelter capacity and the commissioning of new downstream product facilities. This move is part of a broader capital expenditure program aimed at strengthening the company's integrated operations and supporting India's manufacturing goals, particularly in the electric vehicle and defence sectors.

Details of the Odisha Expansion Plan

Hindalco has initiated a ₹21,000 crore expansion to double the capacity of its Aditya Aluminium smelter in Sambalpur, Odisha, adding 3.6 lakh tonnes per annum. Alongside this upstream expansion, the company has also commissioned two key downstream facilities. This includes a 1.7 lakh tonne-per-annum Flat Rolled Products (FRP) plant and India’s first battery-grade aluminium foil manufacturing facility. The investment for these two downstream projects stands at ₹4,500 crore. These initiatives are a component of Hindalco's total planned investment of approximately ₹37,000 crore for Odisha, which in turn is part of a ₹55,000 crore capital expenditure plan across its Indian operations.

Strategic Push into Downstream Products

The investment signals a clear strategic shift towards value-added and downstream products. Satish Pai, Managing Director of Hindalco Industries, noted that the company aims to derive as much as 40% of its EBITDA from downstream operations within the next four years, a significant increase from the current 10%. The new FRP facility is positioned to substitute high-end aluminium rolled products that are currently imported. With India importing nearly 40% of its flat-rolled aluminium, Hindalco's expanded capacity is expected to reduce this dependency by almost half. This will enhance domestic manufacturing capabilities for products like can body stock for beverage cans and specialised alloys required by the defence industry.

Boosting India's EV and Defence Manufacturing

The newly commissioned battery-grade aluminium foil facility is a landmark project for the country. As India's first of its kind, it is designed to indigenise a critical raw material for the lithium-ion battery supply chain. The facility will draw its input directly from the adjacent FRP complex and has the capacity to support up to 100 GWh of lithium-ion cell manufacturing. This development directly supports the government's push for electric mobility and energy storage solutions, reducing reliance on foreign suppliers for essential battery components. The expansion also caters to the growing demand for high-strength aluminium alloys in the defence and aerospace sectors, aligning with the 'Make in India' initiative.

Market Response and Stock Performance

The announcement was received positively by the market. On January 29, 2026, Hindalco's share price rose by 3.16% to an intraday high of ₹1,029.8 on the National Stock Exchange (NSE). The stock maintained its gains throughout the day, trading at ₹1,023.25 per share later in the session, up 2.51% from its previous close. The company's market capitalisation stood at ₹2,29,947.45 crore, reflecting investor confidence in the growth strategy outlined by the management.

A Deeper Look at the Financials

The expansion is a structured part of Hindalco's long-term capital allocation strategy. The projects are designed to create an integrated value chain, from bauxite mining to high-value finished goods, all within Odisha. This integration is expected to improve operational efficiencies and margins.

Leadership's Vision for Self-Reliance

Kumar Mangalam Birla, Chairman of the Aditya Birla Group, stated that the investments are aimed at building a fully integrated aluminium ecosystem in India. He emphasized that this strategy strengthens the nation's self-reliance, supports critical sectors, and accelerates the transition towards advanced and sustainable manufacturing. The long-standing partnership with the state of Odisha, where Hindalco has already invested over ₹25,000 crore in the last 15 years, remains central to this vision.

Impact on Local Economy and Sustainability

The expansion is expected to have a substantial positive impact on the local economy. Hindalco's current operations in Odisha employ nearly 23,000 people, and the new projects are projected to generate over 15,000 additional direct and indirect jobs. Furthermore, the company is integrating sustainability into its growth. A portion of the power required for the expanded smelter will be sourced from round-the-clock renewable energy (RE-RTC), marking a step towards lower-carbon aluminium production and aligning with global energy transition goals.

Conclusion: A Strategic Move for Long-Term Growth

Hindalco's massive investment in Odisha is a calculated move to capture future growth opportunities in high-value sectors while strengthening its core upstream business. By focusing on downstream integration, import substitution, and critical industries like electric mobility and defence, the company is positioning itself not just as a commodity producer but as a provider of advanced material solutions. The positive market reaction underscores the strategic merit of this expansion, which promises to create long-term value for shareholders and contribute significantly to India's industrial ambitions.