Electricals etailer Ao.com is looking at valuation of between £1bn and £1.2bn in its IPO, four times more than the £300m estimate made when it appointed its advisers in September.

Several investors have told the Financial Times Ao.com is eyeing a £1.2bn valuation that would put the firm on a multiple of three times its annual sales.

The valuation boost highlights the healthy appetite among investors for retailers with a strong online offer.

Ao.com turnover reached £260m for the year to March 2013 but is expected to jump to £400m this year. It made £7.2m pre-tax profit in its last financial year.

Fellow online retailer Boohoo.com is also expected to reveal its intention to float as early as next month. The fashion etailer is aiming for a market capitalisation of up to £500m.

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