The Initial Public Offering (IPO) in 2023 has set a new record in history. In Indonesia, 2023 witnessed as many as 79 companies going public, raising a total of IDR 54.14 trillion. This achievement marks a significant increase compared to 2022, which saw 59 issuers raising IDR 33.06 trillion, translating to a growth of 34% in the number of issuers and 64% in fundraising. This aligns with the growing interest of the public in investing in the Indonesian capital market, especially among retail investors. Retail investor participation had the highest transaction share in 2023, followed by an increase in institutional investor participation.
IPO Trends in Indonesia from 2021 to 2023
The Indonesia Stock Exchange (IDX) continues to strive for sustained growth in IPOs. As of January 2024, the number of companies making their listing on the IDX remained stable at 9, like the same period in the previous year, compared to 10 companies the year before. Of the 9 companies listed on the IDX, the funds raised amounted to IDR 1.54 trillion.
Furthermore, 26 companies are in the queue until February 2024, including 5 large-scale asset companies with assets over IDR 250 billion. Additionally, 19 companies are medium-scale asset companies with assets ranging from IDR 50 billion to IDR 250 billion, and the remaining 2 are small companies with assets under IDR 50 billion. In terms of sectors, these companies come from various sectors, with the industrial sector being the most represented, accounting for 7 companies.
Given the growth in IPOs, accurate stock investment decisions by investors are necessary, in line with the IDX’s hopes of offering investment protection. Investors need to perform fundamental analysis as an investment toolkit to achieve expected returns. One necessary analysis is valuation, which determines whether the share price of a company is above or below its fair value.
Valuations for the January 2024 IPO shares are as follows:
Based on the valuation table above, it is evident that IPO companies offer a diverse range of valuations to investors. This diversity in valuation requires further analysis by investors to determine if there are specific factors causing a company’s valuation to be above or below its fair value, such as business prospects in the coming year, sector rotation, and other factors.
Apart from investors, companies also need to conduct in-depth analyses to determine the prices they offer in the capital market. Companies need to work with financial advisors and underwriters to determine the right valuation, where this valuation can meet the fundraising expectations with enthusiastic investor participation during the book building order process.
