Indonesia wants its start-ups to be listed on the local stock exchange, in Southeast Asia News & Top Stories

Indonesia, which has the highest number of unicorns in Southeast Asia, wants to see these startups listed on the country’s stock exchange and hopes to see millennials enter as investors in the companies whose apps they use daily. , a top said a stock exchange official.

A unicorn is a startup worth over US $ 1 billion (S $ 1.38 billion). The six Indonesia-based unicorns are giant Gojek, e-commerce platforms Tokopedia, Bukalapak and JD.id, airline ticket and hotel reservation company Traveloka, and e-money company Ovo.

The Indonesian Stock Exchange (IDX) also wants to start attracting other start-ups with lower valuation, said on July 21 Mr. Pandu Sjahrir, new member of the board of the IDX.

Those who still suffer losses but have promising prospects are now allowed to list their shares on the stock exchange and are placed on the so-called “acceleration” board.

“We have to sort of hunt the elephants. We have to be able to follow them, go and see and sell the idea why IDX is so good for them to raise money,” Pandu said in a webinar. organized by Jakarta. Foreign Correspondents Club (JFCC).

Responding to a question from the Straits Times about the outlook for initial public offering (IPO) activity, Mr Pandu said: “If you compare us to possibly large markets like China or the United States, the top 10 companies listed are all related to technology.

“Indonesia is a little different. Over the past 10 years, the top 10 companies really haven’t changed in terms of mix. It is still mostly run by banks, financial companies, and also run by conglomerates. traditional. “

The coronavirus epidemic has caused an irreversible tendency for people to order items and services online.

Many have used mobile apps provided by Jakarta-based Tokopedia and Bukalapak to shop, as well as food transportation and delivery apps such as Singapore-based Gojek and Grab.

Indonesia had 22 companies that were planning IPOs at the end of last month – the largest in terms of number of IPOs in Southeast Asia.

In total value of their receipts in rupees, the number was quite low compared to last year, when the IDX closed 55 IPOs. Before the coronavirus outbreak earlier this year, the exchange had 28 companies on the list.

The total value was also lower than IPOs in other Southeast Asian countries.

The total market capitalization of IDX rose to 7.25 billion rupees (S $ 690 billion) last year, from 7.023 billion rupees the previous year.

But the Covid-19 pandemic has hit the market, with market capitalization currently falling to around Rs 5.9 trillion.

When asked about the likelihood of a Tokopedia listing, Vice President of Corporate Finance and Investments Randall Aluwi said in a separate webinar hosted by JFCC earlier this year: “When we think of the IPO , this is a positive development because it also signifies the scale that we have reached and also the level of maturity that we have reached as a company. It is certainly something that we aspire to do in the near future. “

In the same webinar earlier this year, Mr. Teddy Oetomo, chief strategy officer of Bukalapak, said the company wanted to enter a phase where it is ready for the IPO, but that doesn’t mean it wanted to do an IPO right away.

“The answer is yes and no. It is not something that we will have to do, but we want to be, as soon as possible, in the position which is ready for the IPO, that is, good profitable governance, good auditor, everything’s okay, financial reporting. It’s more important (than) whether you’re going (for a) IPO or not, “Teddy said.

Bukalapak is, among others, backed by China’s Ant Financial and Singapore’s sovereign wealth fund GIC, while Softbank Vision Fund and Alibaba Group Holding are among Tokopedia’s main backers.

Mr. Pandu of IDX said, “The good thing about those with a ‘valuation’ of the unicorn is that there has been a strong sense of local or foreign institutional investors.”

He said he would target Indonesian millennials as well, as many of them check these unicorns’ apps as soon as they wake up.

Tokopedia and Bukalapak are estimated to have a current value of between US $ 5 billion and US $ 7 billion each, while Indonesia’s largest unicorn, Gojek, is valued at around US $ 12 billion.

Regarding the possibility that a start-up or a company that suffers losses, wants to go public, Mr Pandu said that the exchange will now also welcome these companies.

Previously, only companies that had recorded net profits for two consecutive years were allowed to register.

“We are changing that mindset. We shouldn’t just look at the past. Many of these companies, especially tech companies, are looking to the future,” Pandu said.

“People buy companies in the capital market to buy potential outcomes; to buy potential likelihood of business success.”