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Hindalco-owned Novelis hold-ups United States IPO; shares slide

Hindalco Industries said on Wednesday its U.Sbased unit Novelis has postponed its initial public offering (IPO) due to weak market conditions, sending out shares of billionaire Kumar Mangalam Birla's. business down as much as 6.5%.

In May, aluminium recycler Novelis stated that it was. targeting an assessment of approximately $12.6 billion in its U.S. IPO,. with Hindalco looking to raise up to $945 million through the. sale of 45 million shares at a rate of $18 to $21 apiece.

The delay will likely have a short-term unfavorable impact. on Hindalco, said Sneha Poddar, associate vice president at. Motilal Oswal Financial Services, adding that the business. remains a good pick among metal stocks as its domestic and. U.S.-based service has actually reported

strong results

in the previous quarter.

Novelis will continue to evaluate the timing of the. offering in the future, the company stated in a statement,. without offering more details.

Last month, Novelis

reported

a rise in its fourth-quarter core profit on strong. aluminium demand and greater prices, with the long-term outlook. for the business's profits expected to increase even more, as per. analysts.

Experts at AJ Bell had pointed towards the. unpredictability of commodity rates which could make Novelis. hard to offer.

Hindalco shares trimmed previously losses to last trade. 1.8% lower. It was the second-biggest percentage loser on the. benchmark Nifty 50 index, which is up 0.7%.

(source: Reuters)