Bakrie-owned Indonesia EV firm VKTR seeks US$45m from November IPO

VEKTOR Teknologi Mobilitas (VKTR) - an electric vehicle (EV) firm owned by Indonesian conglomerate Bakrie Group - intends to launch an initial public offering (IPO) on the Indonesia Stock Exchange by November this year.

VKTR chairman Anindya Bakrie, who announced the plans for the listing at an event last week, could not provide further details except to say it is still going through the process by Indonesia’s Financial Services Authority. The underwriters for the IPO will be Ciptadana Sekuritas Asia and Samuel Sekuritas of Indonesia.

According to various local media reports, the company - a supplier of commercial EVs including buses, motorcycles and trucks - plans to raise around US$45 million from the IPO, with the funds being used for business expansion. 

VKTR chief executive Gilarsi Setijono was quoted as saying that the firm is eyeing a market capitalisation of between US$200 million and US$225 million through the sale of newly-issued shares amounting to a 20 per cent stake. 

VKTR is a spin-off company of Bakrie Autoparts, an automotive component manufacturer that has been in business for over 40 years. VKTR’s current focus is the development of batteries and the electrification of the transport industry.

Setijono had said earlier this year that the company plans to not just manufacture battery-powered buses, but also other types of EVs and the necessary infrastructure needed to support this larger ecosystem.

Most of the manufacturing facilities for EV components will be located in Indonesia, with each cluster having a development phase based on its individual needs. VKTR is currently developing 2 electric buses and retrofitting factories in Central Java and East Java. Each factory has the capacity to produce 1,000 buses every year.

The company is also preparing to ship nickel sulphate as a raw material for EV batteries to Gigafactory, a UK-based battery manufacturer. VKTR has a nickel processing plant located near a nickel mine in Central Sulawesi.

Founded 80 years ago in 1942, the Bakrie Group has companies in coal, palm oil plantations, property, manufacturing and infrastructure. The most prominent figure at the conglomerate is tycoon Aburizal Bakrie, a former coordinating minister for economy and the former chairman of the Golkar Party.

The Bakrie Group made headlines earlier this year when its top executives, including Bakrie & Brothers president-director Anindya Bakrie, met Tesla chief Elon Musk in the United States in April.

In March, VKTR signed a deal with British company BritishVolt for the provision of raw materials to produce batteries. It was also reported that VKTR has partnered BYD Auto China, one of the largest players in the global EV sector.

Yanuar Rizky, a capital markets analyst, said that the Bakrie Group’s entry into the thriving EV market represents a significant transformation from its traditional fossil fuel business. The Bakrie Group owns PT Bumi Resource, Indonesia’s largest coal company.

He noted that the company’s diversification into EVs is part of its strategy to participate in the global trend towards a more sustainable economy.

Reza Priyambada, a senior analyst at CSA Research Institute, stated that investors’ responses  to VKTR’s IPO are likely to be mixed. 

They will likely observe or reflect on the stagnant performance of other Bakrie Group companies currently listed on the stock market. The share prices of Bakrie’s companies - among them Bakrie Sumatera Plantation, Bakrieland Development and Bakrie Telecom - “do not show much fluctuation, volatility or dynamic behaviour”, he said.

“Investors will be reluctant to purchase VKTR shares due to concerns about the non-dynamic nature of Bakrie’s shares,” he added.

The second possibility is that investors will have an optimistic view of the potential and performance of the growing EV industry, both in Indonesia and overseas. With the increasing awareness of the green economy and the country’s target to achieve net-zero carbon emissions, the demand for electricity-powered cars will go up as more EVs enter the market, said Priyambada.