10 Indonesian firms set for IPOs this year, mostly in Q2
IT solution provider Anabatic Technologies and oil and surveyor firm Gelombang Seismic Indonesia (GSI) will be the latest companies in Indonesia to go public this year after a weak first quarter that saw just two initial public offerings (IPOs). The bourse is seeking 32 IPOs this year.
With Anabatic and GSI having met with Indonesia Stock Exchange (IDX) representatives on Friday to finalize their IPO, there are now 10 companies slated to make their public debut this year. The other eight firms have met the same requirement, locally known as a “mini expose,” in which they present their IPO plans and financial performances to the bourse.
Most of the companies preparing their IPOs are in the property sector: PP Property (a subsidiary of state-run construction firm Pembangunan and Perumahan; Puradelta Lestari (a firm under Sinar Mas Land); Mega Manunggal Property; and Binakarya Jaya Abadi.
The other companies are Sara- toga group-affiliated mining firm Merdeka Copper and Gold; Lippo group cable TV provider Indonesia Media Televisi; automotive manufacturer Garuda Metalindo and Vallianz Offshore Maritim.
Most of the firms are expected to enter the market by the end of the second quarter. Anabatic Technologies and GSI expects their shares to be listed on the bourse in June,
“Ten days from now, the IDX will send a letter to the OJK (Financial Service Authority) to notify (the body) about Anabatic’s IPO plan,” said Agung Sidharta, president and director of Bahana Securities, which will underwrite Anabatic Technologies’ IPO.
He declined to elaborate on the details of the IPO, such as the amount of shares that will be offered, the expected funds to be raised, or the allocation of proceeds for Anabatic Technologies’ expansion plans.
Anabatic Technologies was founded in 2002, focusing in providing integrated IT solutions for a variety of businesses, including banking, telecommunications, pharmaceuticals and government. The company expanded into India last year, setting up a subsidiary arm in Bangalore.
GSI is an oil and gas exploration company specializing in providing 3D data.
Hendra Kustarjo, president director of Panca Global Securities, which will underwrite GSI’s IPO, said GSI would float around 30 percent of its shares.
“The company is relatively small in assets, amounting to less than 1 trillion rupiah (US$77.52) million, but its portfolio has reached Mozambique. It is also currently bidding for a US$80 million project,” he said.
“The company will use 70 percent of proceeds from the IPO for its capital expenditure, while the remainder will be allocated for working capital.”
The bourse aimed to have 32 companies enter the local stock market this year, but so far only two companies have listed their shares on the bourse since January — the poorest first-quarter showing in five years.
The two companies are hospital operator Mitra Keluarga Karyasehat, which raised 4.45 trillion rupiah, and Bank Yudha Bakti, which took up 58.6 billion rupiah from the stock market earlier this year.
The lackluster IPO environment is reflective of the cautious approach of local companies amid a rupiah depreciation and weak economic growth that is expected to improve only marginally in Southeast Asia’s largest economy this year.
The rupiah dropped 5.3 percent in the first quarter — the worst performance in Asia after Malaysia’s ringgit — according to Bloomberg data. Meanwhile, the government’s economic growth target of 5.7 percent has been deemed overly ambitious, with economists downgrading predictions to near 5 percent, the lowest level in five years.
With the recent boom in demand over U.S. dollar assets due to the recovery of the world’s top economy and a potential rate- hike by the U.S. Federal Reserve central bank later this year, selling pressures have been prevalent in emerging economies, including Indonesia.
Indonesia’s stock market has grown by about 5 percent so far this year, much less than China’s near 25 percent surge and more in line with the gains of other countries in the region, such as Thailand and Singapore (about 3 percent) and Malaysia (4.7 percent).
Despite the challenges, IDX president director Ito Warsito previously said he was optimistic the bourse could reach its target of having 32 companies go public this year.
“Most IPO candidates are still waiting for their audited 2014 financial results. We expect more firms to go public in the second or third quarters,” Ito explained.
The local stocks’ benchmark Jakarta Composite Index (JCI) has continued to break records this year, and overseas investors have bought nearly 7 trillion rupiah worth of stocks — more than they sold.