Renault asks banks to pitch for role in EV unit IPO

Renault Group is inviting investment banks to pitch for a role on the planned initial public offering of its Ampere electric-vehicle business, according to people familiar with the matter.

The French carmaker has been sending out requests for proposals to potential IPO underwriters in recent days, the people said, asking not to be identified because the information is private. It’s considering listing Ampere on the Euronext Paris bourse as soon as the fourth quarter, the people said. 

Renault has been aiming for a valuation of roughly 10 billion euros ($10.8 billion) for Ampere, Bloomberg News reported in November. Deliberations are continuing, and details of the potential offering could change due to market conditions, the people said.

A spokesman for Renault declined to comment.

The company, which has been carving out its EV assets, this month announced internally around 15 in-house managers will be tasked with moving the Ampere project forward under the leadership of Chief Executive Officer Luca de Meo.

Renault is moving ahead with a sweeping overhaul to raise funds for EV development and narrow the gap with bigger rivals such as Stellantis. Its alliance partner Nissan has pledged to buy up to 15 percent of Ampere, and the third member of the alliance, Mitsubishi Motors, is considering an investment. Qualcomm, the largest maker of smartphone processors, will also back the business.

Europe has been facing a drought of major IPOs amid volatile stocks and a bleak economic outlook. The sudden meltdown of Credit Suisse, which ignited a global market rout, has been adding to investor jitters this month. Just about $2 billion has been raised via new listings on European exchanges so far this year, a near 50 percent drop from the same period last year, according to data compiled by Bloomberg.

"Investor appetite for pure-play EV stories has come down in recent months putting some pressure on management to explain how the Ampere investment case differs," Jefferies analyst Philippe Houchois wrote in a March 20 note. "Deeper cooperation with Qualcomm and Google should help Renault catch up or leapfrog some larger competitors with lower execution risk and intuitive software solutions."

The carmaker’s approach is "unique so far in ring-fencing future battery-electric-vehicle product development and manufacturing capabilities," Houchois also wrote.

Even though companies are having difficulty picking the right time to list, the pipeline for IPOs remains strong, stock exchange operator Euronext said last month.

Renault shares are up 60 percent in the past year, giving the company a market value of 10.9 billion euros.