Regulator to Hasten IPO Approval Time
Elizabeth Gloria &Ratna Wahyuningsih
The Indonesian financial regulator has promised to shorten by as much as 10 days the evaluation process for a company intending to undertake an initial public offering in a bid to encourage more companies to list their shares in the local market.
Currently, the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) takes up to 45 working days to complete an IPO evaluation. Anis Baridwan, the head of the corporate finance bureau at Bapepam-LK, said the agency planned to cut the maximum time for consideration to 35 working days.
“If there are no obstacles and all requirements are fulfilled, then in the future, we could clear the evaluation process faster,” he said.
Michael Steven, the president director of investment underwriter Kresna Graha Sekurindo, said the shorter period of evaluation would be good for underwriters involved in IPOs.
“The faster the evaluation process for an IPO, the better it is. If it takes too long, then the market condition might have changed and it affects the price of shares,” Steven said.
Airlangga Hartarto, the chairman of the Indonesian Listed Companies Association (AEI), said he welcomed the plan.
“It adds to the incentives given by the government to encourage more IPOs,” he said, referring to the reduction in income tax for a company that sells a minimum of 40 percent of its shares to the public.
Brokerages engaged in underwriting were confident the capital market would perform better in the second half of the year despite global economic uncertainty.
Johanes Soetikno, managing director of Valbury Asia Securities, said he believed the Indonesia Stock Exchange (IDX) would meet its target of 25 IPOs for the year, given the nation’s strong economic growth.
This year, Valbury has helped with the IPO of heavy equipment distributor Kobexindo Tractors and Tri Banyan Tirta, the owner of Alto Natural Spring Water bottled water brand.
IDX data show that as of May, Indonesia had 446 listed companies.