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Process Of Conducting an Initial Public Offering (IPO)…
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Process Of Conducting an Initial Public Offering (IPO) Of Equity Securities

According to the Financial Services Authority Regulation (POJK) Number 41/POJK.04/2020, an Initial Public Offering (IPO) of Equity Securities is the activity where issuers offer equity securities, such as shares, to the public based on procedures regulated by applicable laws and regulations.

In this context, an IPO is the first public offering conducted by an issuer to sell equity securities, namely shares, to the public through the capital market. This process allows companies to raise funds from the public and become publicly listed companies whose shares are traded on the stock exchange. It includes submitting a registration statement to the Financial Services Authority (OJK), which contains documents and information about the company’s financial condition, business, and plans for using the proceeds from the offering.

An IPO provides long-term funding access for companies, enhances corporate value, improves capital structure, and facilitates the issuance of debt instruments.

Here is a general overview of the IPO process:

  1. Initial IPO Preparation a. The company needs to form an internal IPO team comprising financial, legal, and operational experts. b. The company appoints an underwriter and other supporting capital market professionals such as public accountants, legal consultants, and notaries. c. A General Meeting of Shareholders (GMS) is held to approve the IPO and amend the Articles of Association.

  2. Submission of Documents and Listing Application a. The company submits a listing application to the Indonesia Stock Exchange (IDX) and a collective custody application to KSEI. b. Required documents include a prospectus, audited financial statements, legal reports, financial projections, and other supporting documents.

  3. Submission of Registration Statement to OJK a. The company submits a registration statement along with supporting documents to the Financial Services Authority (OJK). b. OJK reviews the documents and may request additional information before issuing an effective statement.

  4. Public Offering of Shares a. After receiving an effective statement from OJK, the company conducts a public offering of shares (IPO). b. The public offering period lasts 1-5 working days, involving book building and share allocation in case of oversubscription.

  5. Listing and Trading of Shares on IDX a. After completing the IPO, the company lists its shares on the IDX and obtains a stock ticker. b. The company’s shares can then be traded on the secondary market by investors through brokers registered with the IDX.

This article aims to provide general information about the IPO process. If you encounter issues or require legal assistance related to IPO implementation, Suria Nataadmadja & Associates Law Office is ready to assist you!