Only when it receives the appropriate valuation will Hindalco Industries list Novelis, its US-based business, according to managing director Satish Pai. Our primary goal in doing this IPO was to secure a higher valuation for Novelis.Â
After the company’s most recent quarterly reporting, Pai told investors, “I think what was clear is that we were not able to get that valuation at that time, with those market conditions going on.”
Metal powerhouse postponed
The first public offering of Novelis was scheduled for February, but the Aditya Birla group metals powerhouse postponed it until June due to market conditions.
We withdrew it since we weren’t doing it for financial gain. It wasn’t necessary for us. We desired to complete it for the value,” Pai remarked. Hindalco set a price range of $18–$21 per share and intended to sell up to 8.6% of Novelis, including a green shoe option.
Company’s value More
This suggested that the company’s upper market value was $12.6 billion, and that it was valued more than eight times higher on an enterprise value to EBITDA ratio.
Pai stated that the business will review the listing strategy at a suitable moment and that “it would be fair to say that we would only list Novelis when we get the valuation we want.”
This fiscal year, Novelis has set aside $1.8 billion for capital expenditures. A $4.1 billion integrated plant at Bay Minette, the US, an automobile recycling center in Guthrie, the US, and other debottlenecking projects in North and South America are among its ongoing projects.
