Blibli IPO: Tech Sector Bound to Rebound?

Patterning after the Indonesian tech giants BUKA and GOTO’s relatively recent market listings, e-commerce startups are again seeking public funds through an initial public offering (IPO). PT Global Digital Niaga Tbk, popularly known as Blibli, is targeting to raise Rp8.17 trillion in a domestic IPO at a valuation of US$3.5 billion. According to the prospectus, Blibli is set to sell 17.77 billion new shares at Rp410 to Rp460 per share as the public offering will start on November 1st until November 3rd and will be listed on IDX on November 7th under the ticker BELI. The Djarum Group-backed company aims to allocate 50 million shares to employees through the Employee Stock Allocation Program (ESA). Hendry, the super app's Chief Financial Officer, confirms that the proceeds from the IPO are projected to be used to pay off the balance of their banking facility debt of Rp5.5 trillion. The remaining funds will be used as working capital to support the company’s main business activities and development. Regarding financial performance, Blibli’s losses have more than doubled, spiking from Rp1.1 trillion in 1H21 to Rp2.48 trillion in 1H22. Meanwhile, the company’s revenue increased 123% from Rp1.29 trillion last year to Rp6.77 trillion in 1H22. Chandra Pasaribu, Head of Research at Yuanta Sekuritas, said Blibli’s stock performance would depend on the company’s ability to book a profit. The capital obtained from the IPO will be sufficient to cover 4-5 years of losses, but Blibli needs to book a profit to boost investors’ confidence, conveyed Chandra.

Despite the amount of debt, the management is optimistic that the company’s finances will improve as the firm announced a unified omnichannel ecosystem called Blibli Tiket as their drive with two sizable businesses. The two are the supermarket chain PT Supra Boga Lestari Tbk (RANC), or Ranch Market, and the online travel agency PT Global Tiket Network. Business conglomerate Djarum Group, owned by the Hartono duo, acquired tiket.com in 2017 and owns 99.99% of their shares. To strengthen the establishment’s supply chain and expand its operations, Blibli also bought Ranch Market, which engaged in retail sales in September 2021. As of now, Blibli directly owns 70.56% of RANC. According to the CEO of Tiket.com, George Hendrata, in a press conference on Tuesday (10/18), running these three integrated omnichannel with high synergy makes it feels like it will become a significant technological firm in Indonesia that will be sustainable and generate profits. In addition to these key synergies, the company has expanded its fintech sector's wings by launching the Blibli PayLater platform in 2020. Despite the fact that it does not have direct digital banking integrations, unlike its rivals, the Blibli ecosystem is supported by Bank Central Asia (BBCA) owned digital bank, namely Blu. Another support for their digital ecosystem will be obtained from exposure from Bank BCA, Cermati, Polytron, GDP Venture, and Mola TV as fellow members of the Djarum Group.

As global economic weathering and recession fears continue to threaten, 2022 has become an even more toilsome year for companies around the globe. A multitude of intervening factors from high inflation to weakening consumer sentiment has caused hindrance in capital raising - both in the public and private markets. Despite the negative trend and persisting doubts from investors, Blibli CEO and Co-Founder Kusumo Martanto expressed the company’s optimism on the public offering in a press release on Tuesday (10/18). He claimed that this confidence is backed by Indonesia’s resilience - reflected upon the positive numbers on the national consumption data and manufacturing index. With the IMF recently lowering their global economy forecasts, Indonesia, on the other hand, is said to be in a bright spot with its current economic growth still lingering at above 5% in the second quarter of 2022 and the government’s efforts in maintaining stable inflation making Indonesia relatively safe from the forthcoming global recession. Considering said factors, Kusumo believes in a positive prospect for Indonesia’s stock market performance which became the primary reason for Blibli to go public in the Indonesian Stock Exchange (BEI). Kusumo also added that despite the optimistic market, he will be closely monitoring the growing inflation that might hinder Indonesia’s economic growth. The combining elements of assurance signals the rebound of the technology sector in the Jakarta Composite index (IHSG) following months of stagnant movement after plummeting earlier this year.

Sources:

Bisnis

CNBC

Kompas

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