Novelis IPO: US subsidiary of Hindalco Industries declares price band at $18 to $21 per share

  • Novelis IPO: After a successful listing of Novelis shares, Hindalco Industries would own 555 million Novelis shares or 92.50 percent of the common shares of its US subsidiary

Asit Manohar
Published29 May 2024, 11:18 AM IST
Novelis IPO: With the green shoe option available to the US primary market investors, the net proceeds from this public issue are estimated to be between $931.5 million and $1.08 million.
Novelis IPO: With the green shoe option available to the US primary market investors, the net proceeds from this public issue are estimated to be between $931.5 million and $1.08 million. (Photo: iStock)

Novelis IPO: The initial public offer (IPO) of Novelis, with a fixed price band for its public issue, presents a promising opportunity. The US subsidiary of Hindalco Industries Ltd has set the Novelis IPO price band at $18 to $21 per share.

Novelis IPO details

With the green shoe option available to the US primary market investors, the net proceeds from this public issue are estimated to be between $931.5 million and $1.08 million. Sole shareholders of the company, AV Minerals (Netherlands) NV and one more shareholder, are offloading 45 million Novelis shares in the upcoming IPO of the US primary market. After a successful listing of Novelis shares, Hindalco Industries would own 555 million Novelis shares or 92.50 percent of the common shares of its US subsidiary. However, if the underwriters exercise the over allotment option in the green shoe option, then in that case Hindalco Industries' stake in the company would come at 91.40 percent.

Also Read: Gold price jumps ahead of US GDP data release. Opportunity to buy?

After a period of dormancy, the IPO market is showing signs of revival. A robust stock market and economic resilience are encouraging companies to list their shares. Notably, social media company Reddit and Chinese electric vehicle maker Zeekr received strong responses to their stock flotations earlier this year, indicating a positive market sentiment.

The IPO calendar for the second half also looks solid, with companies such as healthcare payments firm Waystar and Mexican airline Grupo Aeroméxico aiming to go public.

Also Read: Brigade Enterprises shares surge over 8% to new record high on solid Q4 earnings

"Risk appetite has improved, and investors are willing to risk some of their money on companies that have a compelling story, particularly ones that have a proven business model," said Dan Coatsworth, investment analyst at AJ Bell.

"Novelis could be a harder sell as commodity prices are notoriously difficult to predict. All it could take is a series of disappointing economic figures to make investors think twice about wanting to back an aluminium producer," Coatsworth added.

Novelis, which has rolling and recycling facilities across North America, South America, Europe and Asia, will list on the New York Stock Exchange under the symbol "NVL".

The Atlanta, Georgia-based company was acquired in 2007 by Hindalco, an aluminum and copper manufacturing company, a unit of Indian multinational conglomerate Aditya Birla Group, headquartered in Mumbai.

Morgan Stanley, BofA Securities, and Citigroup Global Markets, renowned for their expertise and track record, are the lead underwriters for the offering. Their involvement adds a layer of security and confidence to the Novelis IPO.

(With inputs from Reuters)

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:29 May 2024, 11:18 AM IST
HomeMarketsIPONovelis IPO: US subsidiary of Hindalco Industries declares price band at $18 to $21 per share

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