Large IPOs seen to make comeback in Jakarta after February polls
Salamat Sanwan
MID-TO-LARGE sized initial public offerings (IPOs) are poised to resume in Indonesia next year once a new president is elected, which would further boost the South-east Asian country as a hot listing hub after being one of Asia’s busiest markets in 2023.
More issuers from the retail and consumer sectors are likely to come to market in 2024, supported by a recovery in demand, according to BNI Sekuritas president director Agung Prabowo.
Policies implemented by outgoing President Joko Widodo also set the stage for other companies tied to renewable energy and electric vehicles supply chain to raise funds domestically.
The last IPO to raise more than US$500 million in Jakarta was Amman Mineral Internasional in July. Large miners and renewables companies accounted for the bulk of the US$3.5 billion proceeds amassed in new share sales in the country this year.
Indonesia’s Financial Services Authority is targeting a more conservative fundraising goal of 175 trillion rupiah (S$15 billion) to 200 trillion rupiah for next year given a slower economic growth outlook.
While the “trajectory of next year’s capital market is undeniably contingent on the outcome of the upcoming elections”, the nation’s infrastructure and a global shift towards renewable energy and electric vehicles, “have prompted numerous companies centred around these themes to actively pursue timely funding”, Prabowo said.
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More than 200 million people are expected to cast their votes on Feb 14 and elect a leader who would lead the world’s third-largest democracy.
Defence Minister Prabowo Subianto, who is seen gaining support, and his opponent, former Central Java governor Ganjar Pranowo, have both pledged to continue with Jokowi’s legacy.
The official declaration of the winner will be made in March. But if no pair has secured more than 50 per cent of the votes, a runoff poll will be held in June.
“While we expect Indonesia’s elections to be smooth and not divisive, we believe the mid-large sized deals would only come post-elections in February and from evidence of policy continuity,” said Mohit Mirpuri, a senior partner at Singapore-based SGMC Capital, which invests in Indonesian IPOs.
Companies expected to offer shares in Jakarta in the first half include state-backed palm oil firm PalmCo, Pertamina Hulu Energi, a unit of oil giant Pertamina, and fertiliser producer Pupuk Kalimantan Timur, Mirpuri said. They could raise a combined US$2.5 billion through their offerings, he added.
Proceeds raised in Jakarta this year were more than twice the combined amount for Thailand, Malaysia, Vietnam and Singapore, Bloomberg data show. The amount was 62 per cent higher than a year ago and just behind the total proceeds amassed in 2021, when local unicorns listed amid a global tech frenzy.
Still, larger deals will take time as issuers may wait for the dust to settle before working on their documentation needs, according to Moleonoto The, president director at Indo Premier Sekuritas in Jakarta.
Most deals are planned for late next year or early 2025, but “I wouldn’t be surprised if, by early second quarter, you will see a lot of companies juggling to actually accelerate their timetable”, he added. BLOOMBERG
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