(Bloomberg) — Brazilian biofuel company Raizen SA, a joint venture between Royal Dutch Shell Plc and Cosan SA, is said to have raised 6.9 billion reais ($1.3 billion) in Latin America’s biggest initial public offering this year, according to people familiar with the matter.

Brazil’s largest sugar and ethanol producer sold 810,811,000 preferred shares at 7.40 reais apiece on Tuesday, the bottom of the indicative range, said the people, who asked not to be named as the information isn’t public yet.

The company also sold the supplementary allotment of 121,621,650 shares, said the people. The IPO values the firm at about $14.3 billion based on the outstanding shares listed in its filings.

Raizen declined to comment.

Raizen has gained momentum recently on prospects of increased ethanol demand from Brazil’s biofuels program, while the firm also got a boost from record-high sugar prices amid global deficits. Raizen announced in February the acquisition of rival Biosev, its biggest bet on sugarcane in many years, a deal that came as part-owner Shell has been under pressure to reduce its carbon footprint.

Raizen, which is also a major fuel distributor in Brazil, will use proceeds from the offering for investments including building new plants as it expands production of renewable products. The firm plans on having 20 plants to produce second-generation ethanol — which is made from agricultural waste rather than food crops — by 2031.

Execution risk

Some are wary about the upcoming expansion. Raizen’s plan will require heavy investments and an accelerated execution, said Felipe Ruppenthal, an analyst at Eleven Financial Research, in a report dated July 27.

Eleven recommended investors scoop up Raizen shares at up to 8.50 reais, the mid-point of the indicative range. However, Ruppenthal said investors should be wary of execution risk and growth that will only be achieved in the long run.

Banco BTG Pactual SA is leading the offer. Other banks running the deal include Citigroup Inc., Bank of America Corp., Credit Suisse Group AG, Banco Bradesco BBI SA, JPMorgan Chase & Co., Santander Brasil, XP Inc., HSBC, Safra SA and Scotiabank.

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