Mining giant makes debut in Indonesia’s biggest IPO this year

Published Wed, Apr 12, 2023 · 05:37 PM

Harita Nickel's top executives and board members at the Indonesia Stock Exchange in Jakarta on Apr 12. PHOTO: AFP

METAL and mining firm Trimegah Bangun Persada advanced in its Jakarta debut after raising 10 trillion rupiah (S$897 million) in Indonesia’s largest initial public offering (IPO) this year. The sale shed light on the growing investor appetite for the country’s electric-vehicle (EV) sector.

The shares rose 4 per cent to 1,300 rupiah apiece as at 12.31 pm local time on Wednesday (Apr 12). The company, also known as Harita Nickel, offered about eight billion shares at 1,250 rupiah each. They were sold at the top of a marketed range that started at 1,220 rupiah.

The listing attracted attention from domestic and foreign investors seeking to profit from the EV supply chain, which is not largely represented in Jakarta’s stock exchange. Harita Nickel is the first company in South-east Asia’s largest economy to process low-grade nickel ore into battery-grade metal, using a method known as high-pressure acid leaching, or HPAL.

The offering priced at the top of the range further boosted sentiment towards the EV sector, amid President Joko Widodo’s plan to build an end-to-end EV supply chain onshore. The nation has been seeking to lure investments in the industry so it can capitalise on its nickel reserves, which are the world’s biggest.

Harita Nickel’s performance also provides investors cues ahead of the Apr 18 debut of nickel mining and processing company Merdeka Battery Materials, following its 8.75 trillion rupiah IPO.

Allan Ray Restauro, an analyst at BloombergNEF, said: “Harita has successfully commissioned its HPAL project, as it did not face similar delays that other operators in the region struggled with, in terms of tailings management methods.

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“It has also been performing well in terms of its operational milestones, choosing to manage its ramp-up by focusing on battery-grade nickel intermediates first.”

While the firm has not released any official data on the IPO demand, “the bookbuild had reportedly been oversubscribed”, and included regional sovereign wealth funds and international investors, said Clarence Chu, an analyst at Aequitas Research, before the company’s first day of trade.

Prior to Harita Nickel, 11 companies debuted in Jakarta after raising at least US$500 million, based on data compiled by Bloomberg. Within that group, three dropped on the first day of trade, two ended unchanged, and six finished above the listing price. The average increase for the first session was 8.1 per cent, the data shows.