Fervo Energy to raise US IPO valuation from $7.4 billion to $7.4 billion
The geothermal power developer,?Fervo Energy, said that it is targeting an initial public offering (IPO) in the U.S. of up to $7.37 billion dollars. This indicates a strong interest from investors for this listing.
The 'Houston, Texas' based geothermal firm is now looking to raise up to $1.82 Billion in its IPO. 70 million shares are being offered at prices between $25 and 26 cents each.
It had earlier sought a valuation between $6.5 billion and $55.6 million shares, priced at $21 to $24 each.
Fervo has increased its offering as the surge in AI use and data center boom pushes electricity consumption, putting pressure on?the U.S. grid and increasing demand for reliable energy.
AI-related offerings were also?at forefront of this year's IPO market as investors piled into high-growth industries.
According to Renaissance Capital, a company that provides IPO research and ETFs, Fervo is one of?three AI infrastructure companies that are set to price?billion dollar offerings this week. This will be the most IPOs in a week since 2021.
Fervo develops advanced systems to generate carbon-free electricity from the source, unlike traditional geothermal power, which relies on rare events such as volcanic activity.
The company also said that it?uses AI to precision drill in order to access underground heating more efficiently while lowering the surface footprint and reducing risks.
It currently has a potential backlog of?$7.2 billion, with 500 Megawatts under construction and?658 Megawatts contracted for offtake. Its partners are Southern California Edison and Shell.
In his second term as president, U.S.?Donald Trump took a more favorable position on?geothermal than other renewables. He also reversed Joe Biden's policies that were designed to shift the?largest?economy away from fossil fuels.
J.P. Morgan is the lead bookrunner, followed by BofA Securities and RBC Capital Markets. Fervo Energy is set to list on Nasdaq with the symbol "FRVO." (Reporting and editing by Leroy Leo in Bengaluru, Arasu Kanagi Basil and Pragyan Kaita)
(source: Reuters)
