GIC-backed Bukalapak launches $1.5 billion IPO, Indonesia’s biggest in a decade

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SINGAPORE – Indonesian e-commerce firm Bukalapak launched a billon-dollar initial public offering (IPO) on Friday (July 9), the country’s biggest issue in more than a decade, as it taps soaring investor demand for stocks.

Until just a few months ago, Bukalapak was looking to raise just US$300 million. That grew to US$800 million and this week it expanded the offer again, by 25 per cent, as investors clamoured for a piece of the company.

“As the first unicorn to launch an IPO in Indonesia, the hype, especially from retail investors, is quite high,” said Panin Asset Management director Rudiyanto in Jakarta.

The country’s No. 4 e-commerce company, whose name means “opening a kiosk” in Indonesian, is aiming to raise up to US$1.13 billion (S$1.53 billion) by selling as much as 25 per cent of its enlarged capital. It will market the shares at between 750 and 850 rupiah apiece.

It is seeking a valuation of up to US$5.6 billion, double the level two years ago, and is backed by sovereign wealth fund GIC, Ant Financial, local media conglomerate Emtek and Microsoft.

Bank of America and UBS are the joint global coordinators and bookrunners with Bank Mandiri.

The books for the IPO are open until July 19, when Bukalapak will price the shares. It is due to make its market debut on Aug 6.

The listing comes at a time when the pandemic has boosted demand in Indonesia’s US$40 billion e-commerce market. Bukalapak has sought to focus on smaller clients as it competes with bigger rivals Tokopedia, Sea Ltd’s Shopee and Alibaba’s Lazada.

“Our business is focused on micro, small and medium-sized enterprises. They are the prime movers in the Indonesian economy,” said Bukalapak chief executive Rachmat Kaimuddin told an online briefing for investors. “The opportunity to digitalise them and cater to underserved markets, especially outside the big cities, is very promising.”

Around 30 per cent of Indonesia’s e-commerce transactions were estimated to have occurred in second-tier cities last year, but that share is seen rising to 48 per cent by 2025, he added.

More than 60 per cent of the IPO proceeds will be used to invest in the business, which had revenue of US$95.8 million in 2020 and more than 100 million users. The rest of the funds will be used to expand Bukalapak subsidiaries.

With a population of 270 million, Indonesia has one of the world’s fastest-growing online shopping sectors and is home to many start-ups.

GoTo, the merged entity of Tokopedia and ride-hailing and payments firm Gojek, is also planning an IPO. have said that GoTo is looking to raise at least US$2 billion in pre-IPO funding in the next few months, which will be followed by a local listing.

“This will also be like testing the water for the upcoming IPO of GoTo,” said Mr Rudiyanto.

Bukalapak’s and GoTo’s debuts will turbocharge Indonesia’s long lacklustre IPO market, which stagnated further during the pandemic. Money raised via IPOs fell by more than half in 2020 to US$470 million, according to Refinitiv data.

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