Indonesia close to IPO overhaul to lure mega tech listings like Bukalapak, GoTo

Online marketplace Bukalapak will become the first unicorn to take advantage of the new regime and list around August.
Online marketplace Bukalapak will become the first unicorn to take advantage of the new regime and list around August.PHOTO: REUTERS

JAKARTA (BLOOMBERG) - Indonesia is close to finalising a sweeping revamp of listing rules, paving the way for South-east Asian start-up giants from Bukalapak.com to ride-hailing leader GoTo to go public from August.

The authorities are finalising details of new regulations that will allow firms to go public with multiple classes of shares carrying different voting rights, said Mr Pandu Sjahrir, a commissioner at the Indonesia Stock Exchange (IDX). They will also relax curbs on loss-making firms, among other changes.

Online marketplace Bukalapak will become the first unicorn to take advantage of the new regime and list around August, he said. GoTo, the country's biggest tech start-up, valued at US$18 billion (S$24 billion), should follow soon after, he said in an interview.

From Hong Kong to London, stock exchanges around the world are trying to capture a slice of a global initial public offering (IPO) boom. Indonesia joins its fellow bourses in relaxing regulations to entice often loss-making but highly sought-after fast-growth start-ups. Bukalapak is going public as South-east Asia's start-up scene matures and investors seek exits: The region's most valuable private firm, Grab Holdings, aims to go public via a blank-cheque firm in the second half of the year.

"We've been discussing this since last August and there has been a lot of progress," said Mr Sjahrir, a venture investor who serves as chairman of Sea Ltd's Indonesian arm and on the board of commissioners at Gojek, which will soon merge with Tokopedia to form GoTo. As commissioner, Mr Sjahrir oversees and advises the bourse's directors. "It's going to happen soon."

Microsoft-backed Bukalapak could raise at least US$500 million in an IPO, Bloomberg News has reported. At that size, it would exceed the roughly US$421 million raised by 21 domestic offerings so far this year, data compiled by Bloomberg show. Under the new regime, Bukalapak is expected to first start trading on the IDX's development board before moving to the main board, according to Mr Sjahrir, who expects the process to take about six months.

Details of the deal could still change. Bukalapak had also been weighing a US listing via a special purpose acquisition company (Spac) that could value it at US$4 billion to US$5 billion, Bloomberg News reported in March. Bukalapak representatives have declined to comment on its IPO plans.

The US became the go-to venue for tech companies since the New York Stock Exchange allowed dual-class shares in the late 1980s. After missing out on blockbuster deals including that of Alibaba Group Holding in 2014, the Hong Kong and Singapore bourses changed their rules in 2018 to allow multi-class listings. Since then, 146 "new economy" or tech companies have listed in Hong Kong, accounting for 61 per cent of IPO funds raised, according to Hong Kong Exchanges & Clearing.

Indonesia - whose US$450 billion stock market value eclipses that of Singapore's - is headed for a bumper year. There have been 22 IPOs so far this year, while another 24 are in the pipeline, IDX Director I Gede Nyoman Yetna told reporters on Tuesday (June 29). Besides Bukalapak and GoTo, three other local firms with a combined value of roughly US$2 billion are looking to float shares, Mr Sjahrir said without elaborating.

All these could push this year's IPO haul above the US$1.02 billion recorded in all of 2019, data compiled by Bloomberg show. That would make 2021 one of the best years for Indonesian IPOs in the past decade. Both the stock exchange and the financial regulator view tech IPOs as a "game changer" that will draw more retail investors, Mr Sjahrir said.

"We will get there soon because the intent from the beginning has been to accommodate technology-led businesses," he said. Both the regulator and IDX "understand deeply that they are a game changer".