As Australian data centre operator Firmus prepares to launch a $5 billion initial public offering, the country’s second-largest ever, prospective investors are questioning the firm’s surging valuation, citing an “unproven” track record.

Firmus on Thursday priced its shares at A$11 ($7.63) each, giving the company an equity valuation of $30.6 billion, according to a term sheet seen by Reuters. That’s nearly triple the $10.5 billion valuation it achieved following a fundraising round at the start of August.

The leap in valuation in less than two months has prompted some investors to scrutinize whether the company, which is backed by Blackstone, Nvidia and local firms including Wilson Asset Management and Argo, can deliver on its ambitious growth projections.

Firmus estimates that five planned data centres across Asia-Pacific, together with its existing facilities in Melbourne and Singapore, will generate some $5 billion in annual earnings within five years, Reuters reported last month.

“Our process prevents us from effectively buying into, kind of, the hopes and dreams,” said Merlon Capital Partners portfolio manager Kirit Hara.

“We’re anchored towards what’s actually on the table. And what’s on the table in terms of operating and development, we’re struggling to get to that kind of A$40-odd billion market cap.”The company’s $30 billion worth of debt was also a concern given rising costs and interest rates, Hara added. Firmus declined to comment for this report.

Indicative orders from potential investors for the IPO are already above the deal’s size, the term sheet said. Bookbuilding will begin on Tuesday and the stock is due to start trading on the Australian Securities Exchange on October 23.

Morningstar strategist Lochlan Halloway said in a note that Firmus had hallmarks of a “boom phase”, pointing to the “wild increase in valuation in such a short period of time.”Its debt pile is around six times its forecast earnings, Halloway added.

Katana Asset Management portfolio manager Romano Sala Tenna said Firmus‘ IPO prospects were polarising potential investors, and he was still undecided on whether to participate.

“We are struggling with the fundamental arithmetic, and there is an enormous amount of execution which is required to justify the valuation,” Sala Tenna said.

Firmus did not meet the firm’s investment criteria such as cash flow and earnings, but could be attractive as a trade if passive funds participate and create strong demand for the shares after listing, he said.

Sydney’s Blackwattle Investment Partners would not be bidding for Firmus stock, said portfolio manager Joseph Koh.

“Because we don’t have enough confidence in the delivery of the future projects, we can’t get any confidence on the valuation that underpins that,” Koh said.

Blackwattle prefers exposure to the AI theme through companies like Goodman Group GMG.AX, which Koh said had a better track record of developing data centres on time and on budget compared to “unproven” Firmus.

“There are so many unknowns,” he said about Firmus. “But that doesn’t mean we would look to short it either.”