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Bukalapak IPO: Indonesia just had its biggest ever listing as technology takes off in Southeast Asia

bynewsdesk
August 6, 2021

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Jakarta-based Bukalapak began trading on the Indonesian stock exchange on Friday after raising about $1.5 billion.

That’s the largest on record for that exchange, according to data from Dealogic. Indonesian telecom giant PT Telekomunikasi, also known as Telkom, raised nearly $1.7 billion in 1995, although that was in a multi-listing split across exchanges in Indonesia, the United States and the United Kingdom.

Bukalapak is Indonesia’s first tech unicorn, or private multi-billion dollar company, making its market debut.

It has priced its shares at 850 rupiah (about $0.06). Shares shot up nearly 25% during the first trading session, signaling a red-hot investor appetite.

Silva Halim of Mandiri Sekuritas, one of the deal’s underwriters, said the offer was already “8.7 times oversubscribed, with orders from nearly 100,000 investors.”

Bukalapak now plans to exercise an over-allotment option for retail investors.

“We would like to express our deepest gratitude for the tremendous support that Bukalapak has received,” Rachmat Kaimuddin, the company’s president, said in a statement.

Bukalapak was founded in 2010 by three college friends, Achmad Zaky, Fajrin Rasyid and Nugroho Herucahyono. The Jakarta-based company made a name for itself by partnering with Indonesian “warungs” local mom-and-pop stores to help customers order things online.

Since then, it has grown into one of Southeast Asia’s best-known e-commerce players, alongside Shopee, Lazada, and Tokopedia. The company is backed by major investors including: Microsoft (MSFT) and Standard chartered (SCBFF).

Making a splash

The listing comes because Southeast Asian startups are experiencing tremendous growth. In April, Grab, the Singaporean startup, announced it was going public in the United States in a $40 billion SPAC deal, the largest ever.
Malaysia also recently got its first tech unicorn with Carsome, an online used car marketplace, reaches a coveted valuation of a billion dollars.

This has been an excellent year for fundraising for startups in Southeast Asia, according to Venugopal Garre, a director at Bernstein who focuses on South and Southeast Asian technology.

“This is, I think, driven by two main things. One is the fact that liquidity is very rampant locally,” he said, noting that the coronavirus pandemic had played a role in boosting investors’ cash flow.

Grab goes public in $40 billion SPAC deal, largest ever
Global stock markets have soared during the pandemic and have received a major boost from technology. Some sectors have also seen accelerated growth related to the coronavirus crisis as consumer habits have changed.
Garre pointed to the recent success of Shopee, the Singaporean online shopping giant whose parent company, Sea (I KNOW), has seen its market value rise in recent months. The company saw its share price rise from approximately $37 in December 2019 to $304. Its market cap, meanwhile, has risen to nearly $159.5 billion.

That success was convincing for investors looking at the e-commerce market in the region, according to Garre.

The analyst said many investors had neglected opportunities in Southeast Asia in previous years, as growth there was often seen as in the “early stages” and “mainly focused on China and the United States”.

Now that’s changing, though he noted it’s not the only region seeing momentum. In India, businesses have benefited from a flurry of investor interest, with food delivery startup Zomato and online payment provider Paytm recently launching or planning their own public debut.
Zomato shares soar in blazing hot start for first Indian unicorn to go public
Another reason companies there may have attracted more funding lately is a domino effect from Reliance, Garre suggested. The Indian conglomerate, led by the country’s richest man, Mukesh Ambani, launched a massive fundraising campaign last year, drawing international attention to businesses in India in general, Garre said.

Garre believes the public offering parade could help usher in a wave of new offerings in both regions. He dismissed critics who had raised concerns about a potential bubble, predicting that the spotlight would likely create more funding opportunities for startups in every market.

“This is just the beginning,” he said.

Sources

1/ https://Google.com/

2/ https://www.cnn.com/2021/08/06/investing/bukalapak-ipo-indonesia-tech-intl-hnk/index.html

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