Author: Manvi Pant
BENGALURU (Reuters) – Hindalco Industries said on Wednesday its U.S. unit Novelis has postponed its initial public offering (IPO) due to weak market conditions, sending shares in billionaire Kumar Mangalam Birla’s company down as much as 6.5% %.
In May, aluminum recycler Novelis said it was targeting a valuation of up to $12.6 billion in its U.S. IPO, while Hindalco hoped to raise up to $945 million by selling 45 million shares at $18 to $21 apiece. funds.
Sneha Poddar, vice president at Motilal Oswal Financial Services, said the delay could have a short-term negative impact on Hindalco, adding that the company remains a good bet among metal stocks as its domestic and US operations reported strong results in the last season.
“Novelis will continue to evaluate the timing of future issuances,” the company said in a statement, without providing further details.
Last month, Novelis reported a rise in fourth-quarter core profit on strong aluminum demand and rising prices, and analysts said the company’s long-term prospects for earnings were expected to grow further.
Analysts at AJ Bell noted that the unpredictability of commodity prices could make Novelis “difficult to sell.”
Hindalco shares pared early losses and were down 1.8% on the final day of trading. It was the second-biggest decline in the benchmark Nifty 50 index, which rose 0.7%.
