Novelis, the US subsidiary of Hindalco Industries, has put off its plans to raise up to $945 million through an initial public offering (IPO), citing adverse market conditions. If launched, this would have been the biggest IPO by an Indian company in the US.The Aditya Birla Group firm will “continue to evaluate” the timing of the offering in the future, it said in a regulatory update without providing any details.
In May, Novelis finalised a price band of $18-21 per share for its proposed IPO, under which it intended to raise about $810-945 million. With a greenshoe option, the proceeds were estimated to be in the range of $931.5 million to $1.08 billion.The company’s sole shareholder, AV Minerals (Netherlands) NV, a wholly-owned subsidiary of Hindalco Industries, was to offload about 45 million shares. Following the completion of the IPO, Hindalco will own 555 million common shares of Novelis, or 92.5% of the outstanding common shares.
With the greenshoe option, and if the underwriters exercise their over-allotment option in full, Hindalco will hold a 91.4% stake in Novelis. With a total of 600 million shares, the firm would have been valued at $10.8-12.6 billion.Following the IPO, the company said it would list its shares on the New York Stock Exchange under the symbol, NVL.Based on the net debt of $4.35 billion, as per the earlier document filed with the US Securities and Exchange Commission (SEC), the firm’s enterprise valuation was estimated to be in the range of $15.2-17 billion.
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Earlier in February, Atlanta-based Novelis had a draft registration statement with the SEC on a confidential basis, for an IPO.Morgan Stanley, BofA Securities and Citigroup are the lead book-running managers for the IPO, with Wells Fargo Securities, Deutsche Bank Securities and BMO Capital Markets acting as additional book-running managers. BNP PARIBAS, Academy Securities, Credit Agricole CIB, PNC Capital Markets and SMBC Nikko are the co-managers.Novelis, which will not receive any proceeds from the sale of common shares by its sole shareholder, had kicked off the roadshows for the IPO last month.
From: financialexpress
Financial News
