Novelis IPO: Hindalco’s US Subsidiary Sets Price Range at $18-$21 per Share

The upcoming initial public offering (IPO) of Novelis, a US subsidiary of Hindalco Industries Ltd, is gaining attention with its fixed price band. The Novelis IPO has set the price range for its public issue at $18 to $21 per share.

Key Details of the Novelis IPO:

• The IPO aims to raise between $931.5 million and $1.08 million, with a green shoe option available to US primary market investors.
• AV Minerals (Netherlands) NV and another shareholder will be offloading 45 million Novelis shares in the IPO.
• After the IPO, Hindalco Industries will retain ownership of 555 million Novelis shares, representing 92.50% of the company’s common shares. This stake could reduce slightly to 91.40% if the underwriters exercise the over allotment option in the green shoe option.

Market Outlook:

• The IPO market is witnessing a resurgence after a quiet period, encouraged by a strong stock market and economic resilience.
• Companies like Reddit and Zeekr received positive responses to their stock offerings earlier this year, signaling a favorable market sentiment.
• Upcoming IPOs, including those from Waystar and Grupo Aeroméxico, suggest a solid IPO calendar for the second half of the year.

Analyst Insights:

• Dan Coatsworth, an investment analyst at AJ Bell, noted that while investors are showing improved risk appetite, commodity prices can be unpredictable, which may affect Novelis’s appeal.
• Novelis, with facilities across North America, South America, Europe, and Asia, specializes in rolling and recycling aluminum.
• The company, based in Atlanta, Georgia, was acquired by Hindalco in 2007, adding to the aluminum and copper manufacturing portfolio of the Aditya Birla Group.

Underwriters:

• Morgan Stanley, BofA Securities, and Citigroup Global Markets are leading the underwriting for the Novelis IPO, known for their expertise and credibility in the market.