The nation has seen more listings than any other in the region, accounting for six of the eight IPOs this month, according to data compiled by Bloomberg on Monday (Jan 20).
These companies have collectively raised US$57.4mil.
Companies that listed in Indonesia last year had exceptional returns, with 10 out of 55 of them surging more than 500% since their IPO, the data show. Those that went public in January had risen by an average 79% through Friday, weighted by deal size, compared with a drop in the national benchmark gauge. Agricultural-services provider PT Cisadane Sawit Raya has gained the most, up 220%.
In an effort to boost listings, the government said last year it will lower the corporate-tax rate for companies conducting IPOs to 17% in the first five years, lower than that of South-East Asian neighbours such as Thailand and Malaysia.
This year, only tiny firms have gone public in Indonesia, with the average offering size sliding over the past decade.
The shares on offer in such small IPOs are usually distributed to a group of cornerstone investors, meaning the shares may have low liquidity upon listing. That can make the stocks prone to huge price jumps, or, conversely, gut-wrenching price falls.
Still, Indonesia is gearing up for several larger deals this year, including the listing of sanitary product maker PT Softex Indonesia for as much as $500 million, and an IPO by the country’s biggest private carrier, Lion Air, which could raise as much as US$1bil, people familiar with the matter said last year. - Bloomberg
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