The Indonesia Stock Exchange (IDX) collaborated with SW Indonesia to inform the public about IPO Readiness. The collaborative seminar was successfully held on July 10, 2024, at the Main Hall of the Indonesia Stock Exchange Building, Jakarta. More than 150 attendees gained valuable insights into IPO Readiness from two keynote speakers and four expert speakers.
The first keynote speaker was Kristian Manullang, Director of Transaction Supervision and Compliance at IDX. The second keynote speaker was Michell Suharli, CEO of SW Indonesia. The four expert speakers were Listyorini Dian Pratiwi (Head of IDX Listed Company Development Division), Rudy Utomo (Supervisory Board of APEI – Indonesian Securities Traders Association), Agustinus Sugiharto (Managing Partner of KAP Suharli, Sugiharto & Partners – SW Indonesia), and Kukuh Komandoko (Chairman of HKHPM Standard Board – Capital Market Legal Consultants Association). The seminar was moderated by Ronny Budisantoso, Head of Surabaya Office SW Indonesia.
The keynote speakers presented the latest data on the development of listed companies, success stories of companies that went public in the Indonesian capital market and provided an overview of the day’s discussions about the support from IDX and various supporting professions in IPO Readiness. This year, as of July 10, 2024, there were 32 companies listed on the IDX. The latest data collected showed that the IDX had 979 issuers, consisting of 849 stock issuers only, 78 stock and bond issuers, 51 bond issuers/sukuk (Islamic bond), and 1 EBA-SP & Bond issuer. SW Indonesia supports IDX’s goal of having 1,000 issuers by the end of 2024.
The first expert speaker, Listyorini Dian Pratiwi, provided detailed data on IDX conditions. Dian explained IDX’s transformation into a Multi-asset Class Exchange, offering facilities for trading stocks, bonds, and carbon. In terms of stocks, the IHSG reached an all-time high in Q1 2024 with a value of 7,433. In terms of bonds, the latest value of government and corporate bonds and sukuk was USD 392.9 billion as of June 21, 2024. Carbon credit transactions also continued to grow alongside government climate control programs.
The discussion continued with the current condition of IPOs in the Indonesian capital market. During the first half of 2024, Indonesia had listed 25 company stocks on the capital market, with 24 companies in the IDX stock pipeline preparing for IPOs. This positioned IDX as 7th globally in IPO Trends Q2 2024 and the highest among ASEAN countries since 2018.
In terms of growth, Indonesia also recorded a high growth rate of listed companies at 38.6%. “From an investor’s perspective, there was a significant increase during the pandemic, and now there are more than 13 million investors in Indonesia, mostly dominated by millennials, Gen Z, and other young generations. Additionally, there is a transition where the Indonesian capital market is now dominated by local investors with a ratio of approximately 6:4,” Dian added.
In addition to the current state of the Indonesian capital market, IDX also socialized IPO readiness for companies. IDX highlighted the benefits of IPOs, including financial gains, tax incentives, employee loyalty, and competency levels. Additionally, IDX emphasized the importance of understanding listing requirements on various boards and the IPO process for a smooth transition.
SW Indonesia, through its business unit SW Business Advisory, offers trusted business advisory services to strengthen clients’ IPO readiness. Professionals at SW Business Advisory – IPO Readiness conduct regular research on capital market developments in Indonesia. IPOs in the Indonesian capital market are a brilliant choice for companies planning to go public.
In IPO readiness, SW Business Advisory provides business advisory services to guide clients through the IPO process. First, SW Business Advisory offers business advice to enhance the understanding of the role of an IPO for companies. An IPO significantly impacts the financial aspects of a company, serving as an alternative strategy for obtaining funding for business operations. Additionally, an IPO provides tax incentives for both corporate taxpayers and investors involved in stock trading. Beyond financial aspects, an IPO also affects the overall value of the company, as companies are required to maintain corporate governance and enhance professionalism, thereby developing and maintaining the company’s reputation among investors in general.
Second, companies need to understand the requirements that must be met to conduct an IPO. The Indonesia Stock Exchange (IDX) offers three listing boards as options for companies conducting an IPO, depending on the readiness of each company. These include the main board, the development board, and the acceleration board, each differing in the potential amount of funds that can be raised and the complexity of the required aspects to be met. These aspects include corporate governance, finance, accounting, and public offering structure.
Third, companies need to understand the preparations necessary to conduct an IPO. Companies need to plan and analyze their business operations reflected in market capitalization. This planning will determine the target funds the company aims to obtain through the number of shares offered at the appropriate market price. Once a comprehensive plan is in place, companies need to prepare teams, both internal teams and the appointment of underwriters, institutions, and supporting professions. The selection of these teams is crucial to ensure the IPO process runs smoothly within the timeframe and regulatory compliance is met.
Fourth, companies need to understand how the IPO process works. Planning and team selection are part of the initial preparations, which will proceed to the evaluation process. In this process, the company’s internal and external teams collaborate to meet the requirements set by IDX, the Financial Services Authority (OJK), and the Indonesia Central Securities Depository (KSEI). The outcome of this stage is the issuance of permits by IDX and OJK, allowing the company to publish the prospectus and obtain approval for the securities listing. Next, the company enters the book-building stage, aiming to gauge investor interest in the company’s stock offering. During this stage, the company also conducts roadshows to promote the investment aspects of the company’s shares to potential investors, particularly institutional investors.
