Fervo Energy raises $1.89 billion in US IPO

May 12 (Reuters) - Geothermal energy ‌developer Fervo Energy ​said ​on Tuesday it has raised $1.89 billion in its upsized U.S. initial public offering, highlighting robust investor appetite for the listing.

The Houston-based ‌company sold 70 million shares at $27 apiece, securing a valuation ⁠of roughly $7.66 billion. The price range was lifted earlier this week to $25 to $26 per share ‌from $21 to $24.

Surging demand from data ‌centers supporting artificial intelligence tasks, coupled with rapid electrification across transportation, housing and other industries, is tightening U.S. power supply, driving up electricity prices ​and boosting the need for reliable energy.

Fervo develops advanced geothermal systems that generate round-the-clock, carbon-free electricity, offering a dependable alternative to weather-reliant solar ⁠and wind power.

It is one of the three companies seeking to price billion-dollar IPOs this week, ​along with AI chipmaker Cerebras Systems and Blackstone Digital Infrastructure Trust.

J.P. Morgan, BofA Securities, RBC Capital Markets and Barclays were ​the joint lead book-running managers for the ‌Fervo Energy offering. The company aims to list on the Nasdaq under the symbol "FRVO" on Wednesday.

Fervo uses enhanced geothermal ⁠systems, or EGS, technology to address the scalability barriers of traditional geothermal energy, which relies on rare conditions such as volcanic activity, and deploys subsurface monitoring tools, including ⁠AI-enhanced fiber optic sensing.

It is also building its flagship Cape Station project in Utah, ​which is expected to be the world's largest next-generation geothermal project and start delivering power later this year.

The IPO comes at a time when Middle East tensions have pushed ‌crude prices above $100 a barrel, boosting the appeal of U.S. energy assets.

Geothermal energy has also benefited from a ‌more favorable regulatory stance under U.S. President Donald Trump than other renewables, even as ⁠he reversed Joe Biden-era policies ‌aimed at shifting the ​world's largest economy away from fossil fuels.

(Reporting by Pragyan Kalita and Disha Mishra in Bengaluru; Editing by Shilpi Majumdar and ‌Subhranshu Sahu)

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