The Goto and Bukalapak debacles tarnished Indonesia's IPO boom

The Indonesia Stock Exchange (IDX) – Southeast Asia's largest exchange by market capitalization – is poised to build on the listing momentum of 2023, with 60 companies already in the pipeline in 2024. Last year, a record-breaking 79 initial public offerings (IPOs) were carried out on the stock exchange.

However, domestic institutional investors who
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The Indonesian Central Securities Depository (KSEI)
Indonesia's capital market statistics November 2023
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The Indonesian Central Securities Depository (KSEI)

Indonesia's capital market statistics November 2023

About half of IDX-listed stocks, despite representing just 0.4% of investors as of November 2023, are not too enthusiastic, particularly when it comes to technology market debuts.

The dismal performances of homegrown giants – e-commerce platform Bukalapak, the first unicorn to list on the IDX, and Indonesia's largest tech company, Goto Group – have dampened IPO enthusiasm since their respective listings in 2021 and 2022. Both stocks are down about 80% from their record highs, and neither has recovered to its IPO price.

Now Indonesian tech companies are hoping to attract foreign institutional investors.

A favorable factor for these companies is the widely expected U.S. Federal Reserve interest rate cut later this year, according to Christopher Rusli, technology stocks analyst at brokerage Mirae Asset Sekuritas Indonesia. This will increase investor appetite for risky assets like stocks.

The Jakarta-based analyst also claims that technology companies' IPO enthusiasm is partly a result of maturing investments. Venture capital and private equity firms
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Cento Ventures
Technology Investments in Southeast Asia – FY2020
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Cento Ventures

Technology Investments in Southeast Asia – FY2020

161 checks in 2019, a 20% increase in deal count compared to the previous year. The following year, the number of deals saw slower growth of 8%.

“In 2019 and 2020, there was a funding boom for Indonesia’s tech companies,” he told The Ken. “These investments will be due in four to five years [investors] We have to find an exit in 2024 or 2025.”

While the IDX has shown that there is enough investor interest to absorb billions of dollars in IPOs, current IPO contenders are cautiously optimistic.