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IDX will Accommodate ‘Unicorn’ Request for IPO

IDX will Accommodate 'Unicorn' Request for IPO

The Indonesia Stock Exchange (IDX) will accommodate the three main requirements requested by technology startups (startups) with a valuation of above US $ 1 billion or unicorns to list their initial shares on the IDX. One of the special requests of the unicorns is the listing of shares on the mainboard.

IDX Director of Company Assessment I Gede Nyoman Yetna said that his party is very serious about encouraging unicorns to enter the capital market. IDX has met and discussed intensively with the founders and top management of the unicorns. From the discussion, three things emerged that needed to be accommodated.

IDX will Accommodate 'Unicorn' Request for IPO

“Their concern is getting to the mainboard. This matters, because investors will provide more value when they enter the main board,” he said during a gathering with the editor in chief of the mass media, Thursday (11/2).

Give the Unicorn Space and Choice

In the current stock exchange regulations, said Nyoman, there is an obligation for companies that intend to list shares on the mainboard to have tangible assets or assets that are net. However, the unique characteristic of the unicorn is the ownership of intangible assets, which is bigger than tangible assets.

“For that, we immediately follow up, and provide space and options to play the market, not only in terms of tangible assets, but we include other elements, for example, we open the revenue and market utilization sides,” he explained.

IDX will Accommodate 'Unicorn' Request for IPO

Nyoman added, currently, the IDX is in the process of rulemaking rules regarding mainboard access for prospective listed companies such as unicorns. His party is targeting this proposal to be approved in the near future and then implemented.

The unicorn’s access to the mainboard is pursued while maintaining the quality of the mainboard. The IDX is committed to paying attention to the characteristics of emerging companies, in this case, technology start-ups or those utilizing technology.

Meanwhile, the second request that concerns unicorns is the classification of sub-sectors that correspond to the unicorn’s business. The goal is that the unicorns can compete and be compared apple to apple. IDX’s effort to accommodate the sub-sector classification is to make changes to the industrial sector by launching the IDX Industrial Classification (IDX IC) on January 25.

“With the IDX IC, when this unicorn enters the stock exchange, they will enter the technology-based company sector, so when compared, they can be apple to apple, so they can convey growth or performance based on their peers,” said Nyoman.

Unicorn Asks for Special Rights for Its Founders

Furthermore, the wishes of the three unicorns are special rights for the founders. According to Nyoman, founders who have the ability to build an organization ask for special rights in the form of a dual-class share.

The different classes are in the form of multiple voting shares. This means that one share owned by the founder has more rights than common stock in terms of decision making. In order to accommodate this demand, the IDX conducts studies and comparisons with other exchanges in the world, which are already advanced and first implementing policies related to the unicorn IPO.

IDX will Accommodate 'Unicorn' Request for IPO

The IDX also invited discussions on various associations in the capital market. The IDX stated that it had finished conducting the study, which was assisted by independent parties, as well as academics, and the IDX had submitted the study to the OJK.

“Currently, we are intensely communicating to be able to follow up on the existing infrastructure, so that we will accommodate the three major concerns of the unicorns while still paying attention to the existing rules and regulations,” said Nyoman.

Previously, the two largest technology start-ups in Indonesia, PT Tokopedia and PT Aplikasi Karya Anak Bangsa (Gojek), were reportedly finalizing a business merger or merger. The agreement between the two unicorns is targeted as early as this February.