“Bali United, a football club, successfully entered the capital market because it is unique. It was the first soccer issuer to enter the Indonesia Stock Exchange (IDX). On the first day of listing, the price immediately flew,” President Director of PT Kresna Securities, Octavianus Budiyanto, explained.
On the initial listing, the shares of BOLA (Bali United’s code on IDX) rose 69.14% or 121 points from IDR 175 to the level of IDR 296. Furthermore, on the following day, the share was traded in the range of IDR 366 or doubled the price on its IPO.
For this reason, Octavianus invited startups to prepare themselves to seek funding through an IPO. “The Indonesian stock market is very large and the opportunities are still great as well. This should be utilized by startup businesses,” he said during the 31st Investor St Bizcom Indonesia Gathering.
Meanwhile, the Head of Capital Market Investment Banking Trimegah Securities, Lenie Febriana, explained that several things are necessary to prepare for an IPO. According to her, in terms of financial factors, most startups have not gained any profit yet. However, they can ensure investors.
In this case, startups need to make sure that their company is in a phase of a positive margin. This way, it is possible to prepare for an IPO. “Investors need proof of performance, a track record that shows the startup’s business is growing well financially,” she said.
Considering the capital factor, she said that even though the margins are still thin, startups can sell their historical financial performance to draw investors’ attention. “Startup companies that have the potential to continue to grow are very attractive to investors,” she added.
Lenie also emphasized that the equity factor is very important because it will determine a company’s valuation. Another thing that needs to be prepared is to build an image and brand awareness. It is not easy to sell company shares that are not yet known by the public.
Before deciding on an IPO, it is a good idea for startups to hold a road-show to reduce the risk of failure during an IPO. Besides, startups must follow the rules set by the regulator, namely the Indonesia Stock Exchange and the Financial Services Authority.
Lenie also gave several keys to success at the IPO: First, the startup company should be able to communicate well regarding its business growth which is supported by excellent financial performance. Second, it’s important to see the time and market conditions.
This is because even the best companies can fail during an IPO when the economic and political conditions do not support it. Third, startups need to determine the number of shares to be sold to the public because this determines the market absorption factor. Lastly, plan a good marketing strategy.