Rivian IPO: EV Maker increases IPO price range and targets a valuation of $ 65 billion

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Rivian Automotive, supported by Amazon.com, significantly raised the expected offer price of its shares on Friday, with the electric vehicle maker valued at up to $ 65 billion when it went public.

It had targeted a valuation of more than $ 53 billion (about Rs.393,200 billion) earlier this week at a price of $ 62 (about Rs 4,600) per share. The company now expects to sell 135 million shares in the range of $ 72 to $ 74 apiece to raise nearly $ 10 billion on Nov. 9.

The increased price band follows a successful investor roadshow this week where Wall Street’s big IPO investors are betting on Rivian to become the next big player in a Tesla-dominated sector.

The IPO could make Rivian one of the only three companies to have grossed more than $ 8 billion (about Rs. 59,350 billion) in a decade after Alibaba and Facebook.

While the startup hasn’t sold any significant volume of its electric vans or trucks yet, a $ 65 billion valuation to Rivian could make it more valuable than Fiat maker Stellantis NV and bring it closer to legacy automakers Ford and General Motors.

Rivian has invested heavily to ramp up production, including its all-electric R1T pickup truck, which launched in September and beat competition from established competitors like Tesla, General Motors and Ford.

The company had approximately 55,400 R1T and R1S pre-orders in the US and Canada as of October 31.

Rivian said it started shipping the R1T and had revenue for the three months ended September 30. However, the net loss for this period is expected to increase due to higher production costs.

The EV market is booming as consumers become more environmentally conscious and is viewed as a symbol of luxury for many brands. Tesla produced a record number of cars in the last quarter, suggesting strong demand for electric cars.

Amazon has ordered 100,000 electric delivery vans from Rivian as part of the e-commerce giant’s wider effort to reduce its carbon footprint.

However, Rivian will face competition from automakers in both the consumer and commercial van markets.

Ford said it had more than 160,000 orders for its F-150 Lightning electric pickup truck and an electric version of its Transit van was “completely sold out”.

General Motors begins production of electric delivery vans, SUVs and pickup trucks.

Morgan Stanley, Goldman Sachs and JP Morgan are the leading underwriters. Rivian is listed on the Nasdaq under the symbol “RIVN”. The rating includes stocks that underwriters may exercise under the “greenshoe” option.

© Thomson Reuters 2021

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