Rivian is valued at over $ 100 billion after the world’s largest IPO in 2021

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Rivian’s shares rose as much as 53 percent on Wednesday’s Nasdaq debut, giving the Amazon-backed electric vehicle maker a market valuation of more than $ 100 billion after the world’s largest IPO earlier this year. Rupees).

Rivian shares closed at $ 100.73 (around Rs 7,500), up nearly 30 percent from their offering price.

That made Rivian the second most valuable U.S. automaker after Tesla, valued at $ 1.06 trillion. Although Rivian had only just started selling vehicles and had little revenue to report, Rivian was ahead of General Motors at $ 86.05 billion and Ford at $ 77.37 billion (approximately Rs. 4.91.289 crore).

Rivian is also struggling to ramp up production in Illinois as supply chain restrictions hit automakers around the world. Last July, the electric vehicle maker said COVID-19 and its impact on suppliers had delayed the rollout of Illinois vehicles.

As of last year, EV companies have become some of the hottest investments. Including securities such as options and restricted stock units, Rivian’s fully diluted valuation exceeded $ 106 billion (approximately Rs 7.89.460 billion) at its debut price.

The IPO allowed Rivian to raise around $ 12 billion (approximately Rs 89.372 billion) to fund growth, and that number could climb to $ 13.7 billion (approximately Rs 1.02.039 billion) if the full over-allotment the shares are exercised. This makes it the largest IPO in the US since the Alibaba Group went public in September 2014.

“Moving to a public company (and) growing our capital base” enables Rivian to “develop promising products and volumes and growth in terms of new segments and new vehicles that we will get into,” said Rivian Chief Executive RJ Scaringe said in an interview.

Wall Street’s largest institutional investors, including T. Rowe Price and BlackRock, are betting that Rivian will become the next big player in a Tesla-dominated sector as automakers in China and Europe come under increasing pressure to eliminate vehicle emissions.

Amazon is Rivian’s largest shareholder with 20 percent.

Rivian’s IPO comes against the backdrop of the United Nations Climate Change Summit, where automakers, airlines and governments announced a series of pledges to reduce greenhouse gas emissions from global transport.

GM chief Mary Barra said Wednesday that Rivian’s IPO only showed how undervalued her company was.

“What it sets out to me is the great opportunity,” she said at an event for the New York Times. “General Motors is so undervalued.”

Expansion plans

Rivian has invested heavily to increase production, doubling its premium all-electric R1T pickup truck launched in September. The plan is to follow suit with an SUV and a delivery van and hit some of the hottest segments in the market.

The Irvine, California-based company plans to build at least one million vehicles a year by the end of the decade, Scaringe said. The company has a facility in Illinois and has announced plans to open a second US facility and eventually to build manufacturing in China and Europe.

“Rivian is in the early stages of shipping its first vehicles to customers, which shows investors that the company and vehicles are ‘real’ and not just pictures in a slide deck,” said Michael Shlisky, analyst at DA Davidson & Co. “This has been an issue with other EV companies for the past few months.”

On Wednesday, 10 environmental and advocacy groups, including Sierra Club and Greenpeace, urged Rivian to engage with unions as the company grows. Workers at Rivian’s Illinois facility are not unionized.

Founded by Scaringe in 2009 as Mainstream Motors, the company was renamed Rivian in 2011, a name derived from “Indian River” in Florida, a place Scaringe visited in a rowboat as a teenager.

Scaringe will hold all of the outstanding Class B common shares after the IPO and receive 10 votes per share, Rivian said in a filing.

Rivian, also backed by Ford, calculated a flip-flop of 153 million shares at $ 78 per share, grossing nearly $ 12 billion, making it one of the largest US IPOs of all time . Ford declined on Wednesday to announce plans for its approximately 12 percent stake in Rivian, which was valued at approximately $ 10 billion (approximately 74,481 croe).

Amazon, T. Rowe Price, Franklin Templeton, Capital Research and Blackstone are part of a group of “cornerstone investors” who are reported to purchase up to $ 5 billion worth of shares.

Rivian’s shares were also offered to retail investors through Social Finance (SoFi).

Morgan Stanley, Goldman Sachs and JP Morgan were the lead underwriters for the offering.

© Thomson Reuters 2021

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