Bukalapak’s $ 1.1 billion IPO, Indonesia’s largest in a decade, covered on launch day – sources
- Company looking to raise up to $ 1.1 billion
- Books covered in full price range – sources
- Books are open until July 19
- Investors keen to buy technology stocks
SINGAPORE / JAKARTA, July 9 (Reuters) – Indonesia’s largest IPO in more than a decade, the billion-dollar bid from e-commerce company Bukalapak, has received enough orders from investors to cover the sale on its launch day on Friday, two sources said, reflecting strong appetite for tech stocks.
The listing comes at a time when the pandemic has boosted demand in Indonesia’s $ 40 billion e-commerce market. Bukalapak has sought to focus on smaller customers as it competes with its larger competitors, Tokopedia, Shopee from Sea Ltd (SE.N) and Lazada from Alibaba.
Two sources close to the deal said a string of orders from large investors meant Bukalapak’s IPO books were hedged within its indicative price range.
The sources declined to be identified as they were not authorized to speak to the media.
Until a few months ago, Bukalapak, the fourth largest e-commerce company, was looking to raise just $ 300 million. That rose to $ 800 million and this week it further widened the offer, by 25%, as investors demanded a portion of the company. Read more
“As the first tech unicorn to launch an IPO in Indonesia, the hype, especially from retail investors, is pretty high,” said Rudiyanto, director of Panin Asset Management in Jakarta. Unicorn is a private startup that reaches a valuation of $ 1 billion.
Bukalapak, whose name means “open a kiosk” in Indonesian, aims to raise up to $ 1.13 billion by selling up to 25% of its expanded capital. He trades the shares for between 750 and 850 rupees each.
It is targeting a valuation of up to $ 5.6 billion, double its level two years ago, and is backed by Singaporean sovereign investor GIC, Ant Financial, local media conglomerate Emtek (EMTK.JK ) and Microsoft (MSFT.O).
The books for the IPO are open until July 19, when the share price will be set. The company is expected to debut on August 6.
Bank of America and UBS are the global coordinators and bookkeepers with Mandiri.
“Our business is focused on micro, small and medium enterprises. These are the main drivers of the Indonesian economy,” Bukalapak CEO Rachmat Kaimuddin said during an online investor briefing.
“The opportunity to digitize them and address underserved markets, especially outside major cities, is very promising.”
It is estimated that around 30% of e-commerce transactions in Indonesia took place in second-tier cities last year, but that share is expected to reach 48% by 2025, he added.
More than 60% of the proceeds from the IPO will be used to invest in the company, which achieved revenue of $ 95.8 million in 2020 and more than 100 million users. The rest will be used to expand the subsidiaries of Bukalapak.
With a population of 270 million, Indonesia has one of the fastest growing online shopping sectors in the world and is home to many startups.
GoTo, the merged entity of Tokopedia and ride-sharing and payment company Gojek, is also considering an IPO. Sources said GoTo is looking to raise at least $ 2 billion in pre-IPO funding over the next few months, which will be followed by a local listing.
“It will also be like testing the water for GoTo’s next IPO,” said Rudiyanto of the Bukalapak IPO.
The debuts of Bukalapak and GoTo will energize Indonesia’s long lackluster IPO market, which has further stagnated during the pandemic. Funds raised through IPOs were more than halved in 2020 to $ 470 million, according to data from Refinitiv.
Reporting by Anshuman Daga and Fransiska Nangoy Additional reporting by Tabita Diela; Editing by Edwina Gibbs and Mark Potter
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