Analysis: SOE IPOs face an uphill battle against historical pitfalls
State asset fund Danantara plans to take several state-owned enterprises (SOEs) public in 2027, but whether the listings will attract investor interest remains uncertain. The companies have yet to be identified, and Danantara has pledged to conduct rigorous reviews before determining which are ready to enter the stock market. The key question, however, is whether the selected companies can offer…
Danantara, a state asset fund, aims to take several state-owned enterprises (SOEs) public in 2027 via initial public offerings (IPOs) on the Indonesia Stock Exchange (IDX). These IPOs aim to enhance corporate governance, transparency, and sustainability of business performance. However, the success of these IPOs relies on the selected companies offering sustainable returns and adequate investor protection, as previous cases suggest otherwise.
The SOEs under consideration span finance, infrastructure, and mining sectors, with potential candidates like PT Pegadaian, PT Pupuk Indonesia, and PT Angkasa Pura Indonesia. The planned listings come after a three-year pause in SOE IPOs since February 2023, when Pertamina Geothermal Energy raised Rp 9.05 trillion (US$506.87 million).
Four stages must be completed by an SOE before entering the capital market: fundamental business review, consolidation, restructuring, and value creation. Analysts caution that state ownership does not guarantee investor interest, and prospective shareholders will scrutinize revenue growth, profitability, cash flow, debt structure, and operational efficiency.
Transparency, quality of prospectuses, and comprehensive disclosure of business risks will be crucial to building investor confidence. Indonesia's track record with SOE IPOs is mixed, with examples like the 2010 PT Krakatau Steel IPO marred by irregularities.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
