GoTo Group will proceed with its stock market debut at Indonesia Stock Exchange (IDX), valuing the ride-hailing, e-commerce, and fintech business at up to US$28.8 billion, overcoming the recent market collapse that damaged Sea Ltd. and Grab Holdings Ltd. According to a prospectus filing, GoTo, founded last year through the merging of Indonesia's two most valued online businesses, Gojek and Tokopedia, intends to generate approximately Rp18 trillion (US$1.26 billion) in its IPO. It intends to sell up to 52 billion new Series A shares at a price of Rp316 to Rp346 per share. This values the company between US$26.2 billion to US$28.8 billion stated in the GoTo press conference. At current prices, GoTo would be the fourth most valuable enterprise listed on the Indonesian Stock Exchange (IDX), behind PT Bank Central Asia (BBCA), PT Bank Rakyat Indonesia (BBRI), and PT Telkom Indonesia (TLKM). GoTo intends to list some of its shares on foreign exchanges, a process known as dual listing, in order to raise more capital. It is worth noting that GoTo owns stakes in a number of public corporations. The first is PT Matahari Putra Prima Tbk (MPPA), a Lippo Group subsidiary. GoTo owns 5.98% of MPPA shares directly and has a 2021 investment horizon through PT Pradipa Darpa Bangsa (PDB). Then, in 2020, GoTo invested in another unprecedented public company, purchasing 21.4% of PT Bank Jago Tbk (ARTO). GoTo invests in ARTO through its subsidiary, PT Dompet Karya Anak Bangsa (DKAB), more commonly referred to as GoPay, GoTo's financial arm.
This combined entity will be the largest in Indonesia's history, accounting for 2% of the country's GDP, and will have served 270 million consumers by 2021. They hope to contribute between 5% and 10% to the GDP in the long run through their various business lines and powerful super-app. In 2009, Tokopedia launched as an e-commerce marketplace connecting small businesses with consumers. Gojek was founded a year apart in 2010 as a ride-hailing platform for motorbike taxis. The two companies then partnered in 2015, with Gojek drivers providing same-day delivery for Tokopedia products. The public response has been inconsistent. However, the majority were naturally focused on profitability, given that the decacorn (a term used to refer to a startup or startup company valued at more than US$ 10 billion or Rp. 140 trillion) is still losing money. GoTo acknowledges this openly, stating that future profitability is contingent upon management's ability to efficiently develop and market the company. The statement is a measure of the company's openness or transparency to the public and is included in the prospectus as a disclosure of the risks involved, even though the net loss typically decreases year over year. "The Company cannot guarantee that it will continue to earn a profit in the future. The success of other technology companies is not indicative of the company's future financial performance." stated in the prospectus (page 114). This point distinguishes the perspective and characteristics of capital market investors from those of GoTo shareholders. GoTo is an unattractive stock for those who believe that the value of IPO shares should be measured in terms of profitability ratios and dividend prospects.
The IPO will be a watershed moment for Southeast Asia's largest internet economy. Despite the global market turmoil, it is proceeding with its IPO plans, which have seen a sharp decline in technology stocks from the United States to China and Southeast Asia. "This is the right time, given the supportive investors, the supportive market, and the opportunity to do so," President Patrick Cao said Tuesday (3/15) during an online media conference GoTo. "None of us can forecast what will happen to the market in the coming weeks or months." GoTo is benefiting from a booming stock market and economic recovery in the world's fourth-largest country. In contrast to a selloff in Chinese equities, the benchmark index is hovering near an all-time high. Indonesia's economy is reviving after emerging relatively unscathed from the latest virus outbreak, with the government forecasting gross domestic product growth of 4.8% to 5.5% this year. People are already spending more time in shopping malls and restaurants than they were prior to the pandemic, and more Indonesians are turning to digital payment methods. According to Bloomberg, in January, the value of electronic transactions increased by 67% year over year, while digital banking activity increased by 63%. According to the prospectus, some existing shareholders have agreed to an eight-month lockup period, while GoTo founders will be unable to sell their shares for two years. The favorable Indonesian stock market, combined with support from existing investors and young customers of GoTo's services – which include food delivery and digital banking – are assisting the company in gaining access to capital markets. Chief Executive Officer GoTo Andre Soelistyo said. "This IPO is entirely new money; no existing shareholders are selling," he explained. "As a public company, our ability to access the market will be much more dynamic and rapid," he said, noting the possibility of a rights issue and dual listing. In sum, IPO proceeds will bolster the prospects for the technology sector's future in the market, and investors should keep a close eye on what the market reveals.
Sources :
Bloomberg
CNBC Indonesia
CNN Indonesia
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