Bukalapak: Lookout of Financing Tech Companies?
Bukalapak is one of the two large technology companies in Indonesia that plan to list their start-ups in an initial public offering (IPO) this year. The debut, intended to take place in August 2021. Bukalapak’s IPO is expected to be the largest in Indonesia in 10 years and the largest ever for a start-up in the country. Taking advantage of the sharp increase in investor interest in Southeast Asia’s fast-growing technology industry, Bukalapak will sell 10% to 15% of the company’s shares which is worth US$800 million or equivalent to Rp11.2 trillion (exchange rate of Rp14,000/US$). They target the company’s share valuation between US$ 4 billion to US$ 5 billion. The Indonesia Stock Exchange (IDX) claimed to have received the listing prospectus. IPO proceeds range between US$ 500 million and US$ 800 million, depending on investor demand and market conditions. However, capital market players were surprised by the disclosure of Bukalapak's Mini Expose document on Wednesday (6/23). Mini exposes are usually presented by prospective issuers when they want to list their companies to the IDX. The document is believed to contain detailed information regarding the IPO timeline, as well as the legal consultants along with global and domestic securities underwriters, which was revealed on that date.
According to the leaked documents, Bukalapak will later use the code BUKA in the bourse, and will start listing on July 29 according to the schedule. It was stated that Bukalapak will provide a maximum ownership of 25% of the company's issued and paid-in capital. In addition, Bukalapak will provide workers with allotment shares, also known as employee stock allocation (ESA), up to 0.1% of the total issued shares of the IPO, to be carried out together with the IPO. After that Bukalapak will allocate up to 4.9% of the total offer and paid-in capital to management and the management in the Employee Stock Option Plan (MESOP) plan, UBS (Global), Bank of America Securities and UBS (Global) were appointed by the company as joint global coordinators. UBS (Global), Bank of America Securities and Mandiri Sekuritas are joint bookrunners. PT Mandiri Sekuritas and PT Buana Capital Sekuritas are joint lead underwriters, alongside the domestic underwriters, PT UBS Sekuritas Indonesia. Quoted from CNBC reports, the Director of Evaluation at IDX, I Gede Nyoman Yetna, has not yet issued a clear response to the release of the document. "Some e-commerce companies have already submitted paperwork related to e-commerce. Until OJK approves the release of the initial prospectus to the public, the exchange has not been able to provide the names of potential listed companies, as described above in OJK Regulation Number IX.A.2.,” mentioned I Gede Nyoman Yetna, Tuesday, (6/8).
Therefore, as we witnessed this phenomenon of Bukalapak IPO plan, it will likely bring another form of financing for the IT companies. This move made by Bukalapak has been awaited for a period of time now, and the long-sought arrangement is predicted to herald a wave of Indonesian listings in the lDX. This prophecy was voiced by a Center for Strategic and International Studies (CSIS) economist Yose Rizal Damury, in which the emergence of digital enterprises in the capital market will broaden the national investor base, particularly among the younger generation. Furthermore, market liquidity is expected to improve. “This digital sector provides benefits for the Indonesian economy. Not only growth, but also financial inclusion and through enhancing the development of the society,” said Yose to detikfinance, Friday (6/18). Previously, the trend of booming IT firms going public on the stock market occurred on the Hong Kong stock exchange. IPOs for technology companies were successfully carried out by the Hong Kong Stock Exchange (HKG) in 2018. Since then, the HKG has received 146 technology companies, which have increased their market capitalization of US$88 billion. In Indonesia, The OJK is working closely on IPO rules for IT companies by using the shares with multiple voting rights (SHSM) or multiple voting shares classification (MVS). The inclusion of technological companies to the IDX, as well as the OJK's creation of suitable regulations, would undoubtedly enhance young investors' willingness to invest and enter the capital market.
Sources :
CNBC Indonesia
Detik Finance
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