SOE’s IPO PROSPECTS 2023
PalmCo can play the role of nucleus-plasma with smallholder oil palm. PalmCo can become an offtake of fostered partners who are spread among existing plasmas. Because it is part of a state-owned company, the PSO function can also be optimized for the price stabilization function. Even though PTPN’s land for palm oil is only about 10 per cent of national production.
By becoming a public company, several advantages can be enjoyed by BUMN or its subsidiaries. First, get fresh IPO funds needed for business expansion. Secondly, becoming a public company means that it will improve the quality of corporate governance so that intervention from any party can be minimized. As a public company, the third benefit is that you will be required to have excellent performance so that investors will continue to look at it.
Besides that, the IPO of a BUMN subsidiary is a good step to provide alternative funding for state companies. So far, most BUMNs and their affiliates prefer debt instruments as a source of financing, so it becomes a heavy burden during a crisis such as a pandemic because interest expenses must still be paid. Meanwhile, with an IPO, this financing instrument is equity in nature. So going public is a good step for balancing the financing structure of BUMN and BUMN children.
The second issue that must be considered is the timing of Go Public. 2023 has been predicted to be a difficult year where the economic recession and high inflation cannot be stopped. The implication is that many global investors’ investments in the capital market are withdrawn, and they prefer interest-rate instruments that promise higher returns. Of course, this affects the Indonesian capital market as well.
If the plan to go public in 2023 for BUMN is to be continued, it certainly requires extra hard steps to be able to attract investors. The book-building process must be carried out with greater precision to obtain an estimate of investor interest. Maybe some of the sweeteners should also be issued to attract market interest in the state company’s IPO.
We hope that the BUMN IPO plan can proceed smoothly amidst the various obstacles it faces. Research shows that the performance of Tbk companies is usually better than non-Tbk companies. State companies are expected to have better performance when they become publicly listed companies.
