Rubrik's US$700m NYSE IPO is likely to price above range later on Wednesday, reflecting strong investor demand for high-growth software offerings after a dearth of such deals in recent years.
The order book for the cybersecurity software firm's offering of 23m shares or about 13% of outstanding at US$28-$31 closed more than 20x covered late Tuesday.
The syndicate led by Goldman Sachs, Barclays, Citigroup and Wells Fargo subsequently told accounts the offering would price above-range late on Wednesday.
A syndicate banker said this guidance implied the offering could come as high as US$33-$34 or US$2-$3 above the top of the range.
At these levels, the IPO would value Rubrik at a EV multiple of around 6x-6.5x forward revenue, still an attractive discount to a high-growth comp set with a median multiple of around nine.
On Tuesday, the syndicate said the offering had seen strong conversions from meetings with mutual funds/long-only investors, pointing to wide participation in the first US software IPO of the year and only the second since late 2021.
The shares are expected to begin trading on the NYSE under the symbol "RBRK" on Thursday.
The VC-backed company, founded in 2013 and now serving 6,000 customers, made a net loss of US$354.2m last year.
Bankers are hoping investors will instead focus on Rubrik's 47% growth in subscription revenue, even though about 60% of this growth came from existing customers migrating from perpetual licences to its cloud product. Because of this, Rubrik's overall top-line grew only 5% last year, though analysts still expect 35%-40% growth in the year ahead.
In 2021, Rubrik forged a strategic alliance with Microsoft that included an equity investment at a US$4bn valuation.