Isra-Mart srl:Gevo pumps up optimism with biofuel IPO

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Shares in US biofuels and renewable chemicals specialist Gevo made their debut on the Nasdaq stock exchange, immediately rising 16 per cent above the initial offer price, fuelling speculation the clean tech IPO market will enjoy a bullish 2011.

The company, which is backed by high profile clean tech investor Khosla Ventures, sold 7.15 million shares at the top end of its $13-$15 price range, raising $107.25m.

The share price then rose up to 16 per cent suring yesterday's first day of trading before closing the day at $16.44, an increase of 9.6 per cent on the debut price.

Analysts said investor interest in the company had been driven by comparisons with biofuels rival Amyris, which was also backed by Khosla Ventures and pulled off a better than expected IPO last September.

They also speculated that Gevo's plan to deploy its technology at existing ethanol plants, reducing the need for the large injections of capitol required to build new refineries, had helped stoke investor interest.

The Colorado-based firm has developed a biocatalyst technology that allows it to produce isobutanol from a wide range of different feedstocks, including non-food-based cellulosic material as well as grains and sugar cane. Isobutanol can be used to produce a variety of biofuels and chemical products, such as solvents, plastics, fibers, and rubber.

Gevo is yet to post a profit, but expects to start selling isobutanol on a commercial scale during the first half of next year and has said it will use the money raised from the IPO to either purchase or partner with ethanol refineries that can be converted to produce isobutanol.

Interest is growing in so-called second generation biofuels, which experts claim can be produced without impacting food supplies and eating into agricultural land.