By Ateev Bhandari and Arasu Kannagi Basil

(Reuters) -Firefly Aerospace will begin trading on the Nasdaq on Thursday after raising $868.3 million in the largest U.S. listing this year by a space tech company.

Firefly - which became the second private enterprise to achieve a lunar landing five months ago - priced the IPO at $45 per share, above an already upsized range, securing a valuation of $6.32 billion.

That is ahead of both Trive Capital-backed Karman Holdings and Voyager Technologies, which went public earlier this year.

U.S. initial public offerings have picked up pace after tariff-driven volatility hampered listings in April, reigniting a long-awaited recovery of first-time share sales.

"I think we will continue to see strong debuts for large-cap IPOs for the remainder of the year," said Ross Carmel, partner at law firm Sichenzia Ross Ference Carmel.

"In the event the Federal Reserve decides to cut interest rates, I think we can see this trickle down to both mid-cap and small-cap IPOs as well."

Formed in 2017, Firefly specializes in cost-effective launch vehicles and spacecraft, including lunar landers, to provide space launch and mission services.

While Houston-based Intuitive Machines was the first private firm to reach the moon last year, its Odysseus lander made a lopsided touchdown. Firefly's Blue Ghost landed safely on the moon in March.

"Firefly has already demonstrated responsive launch capabilities and delivered a lunar payload-proof points that matter to the Space Force and NASA," said Ali Javaheri, emerging technology analyst at PitchBook.

The company had a backlog of roughly $1.1 billion and more than 30 planned launches under contract as of March 31.

"Investors will likely focus on backlog growth, gross margin trends as production scales, and Firefly's cash runway post-IPO," Javaheri said.

The company, however, expects to incur net losses for the next several years, according to filings.

SPACE SCRUTINY

Rising geopolitical tensions and deteriorating international relations have put a spotlight on space and defense contractors, as U.S. President Donald Trump aims to bolster military and civil space programs with the efficiencies of for-profit companies.

Elon Musk's SpaceX - which has about $22 billion in government contracts - has grown critical to the global satellite network, potentially managing a crucial element of the "Golden Dome" missile shield planned by Trump.

Musk's latest tensions with Trump, however, have prompted officials to solicit bids from other rocket and tech manufacturers, with some citing national security concerns around concentrated dependency.

In early 2022, pressure from certain U.S. government bodies led to Ukrainian entrepreneur Max Polyakov divesting his ownership in Firefly to AE Industrial Partners, which currently owns more than 40% of the Texas-based company.

Since then, Firefly has attracted a robust mix of investors.

"Northrop Grumman's involvement signals alignment with national security priorities, while Mitsui's presence opens pathways to Asia and helps shore up supply-chain resilience," PitchBook's Javaheri said.

U.S. defense contractor Northrop Grumman, which invested $50 million into Firefly in May, is one of the three suppliers of solid rocket motors to the U.S.

Goldman Sachs, J.P. Morgan, Jefferies and Wells Fargo Securities are the lead underwriters for the IPO.