By Prakhar Srivastava and Aditi Tiwari
June 10 (Reuters) – Gas generator maker ERock’s shares fell 6.5% in their New York Stock Exchange debut on Wednesday as investors remained selective toward new listings despite a broader revival in the U.S. IPO market.
The Houston, Texas-based company’s stock opened for trading at $20.10 apiece, below the offer price of $21.50, valuing the firm at $5.49 billion on a fully diluted basis.
ERock raised $600 million in its U.S. initial public offering on Tuesday.
“The aftermarket performance indicates that investors are pushing back on the valuation amid execution risk,” said IPOX Research Associate Lukas Muehlbauer.
“ERock has a growth angle with a substantial backlog tied to data center power demand, but the market wants proof that backlog converts into revenue before giving the company a more premium public-market valuation,” Muehlbauer added.
Despite strong investor interest in companies positioned to benefit from surging energy demand from data centers and AI infrastructure, ERock’s debut contrasted with the strong reception for peer Innio’s on Nasdaq last week.
SURGING DATA CENTER BACKLOG
The company’s contracted power system sales backlog surged nearly nine-fold year-over-year to $1.28 billion as of March 31, according to its IPO filing.
CEO John Carrington told Reuters that about $1.1 billion of the backlog was linked to AI data center projects, highlighting the company’s growing exposure to the sector.
“We decided that it was the right time (to go public) because our projects were getting bigger and bigger,” Carrington said.
ERock is also working with El Paso Electric to provide 366 megawatts of onsite power for Meta’s $10 billion AI data center in El Paso, according to the filing.
Carrington said changing a large language model at a data center can cause significant spikes in power demand and that ERock’s systems can respond quickly to such changes while maintaining stable power output.
(Reporting by Aditi Tiwari and Prakhar Srivastava in Bengaluru; Editing by Sahal Muhammed and Joyjeet Das)
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