E-commerce firm Bukalapak got off to a blazing start of trading on August 6 as the first unicorn to go public in Indonesia, following the biggest initial public offering (IPO) the country has ever seen.

The company, which is listed under the ticker symbol “BUKA” on the Indonesia Stock Exchange (IDX), saw its stock rise 24.71 per cent to 1,060 rupiah (74 US cents) apiece during the first hour of trading, from its IPO price of 850 rupiah.

IDX president director Inarno Djajadi said Bukalapak’s IPO had attracted 96,000 investors.

“This listing has made history, because Bukalapak is the first unicorn to list on IDX and in the Southeast Asian stock markets,” he said on August 6. “We hope that Bukalapak can become an inspiration for unicorns, centaurs and other tech companies and make IDX their house of growth.”

Bukalapak is the 28th company listed on IDX this year and the 740th overall.

“Even though Bukalapak’s IPO was carried out in the middle of the Covid-19 pandemic, interest in Bukalapak’s shares remains high. This reflects trust in Bukalapak. Through this IPO, we believe, we can push the growth of small and medium enterprises to the next level,” Bukalapak president director Rachmat Kaimuddin said in a press statement on August 6.

He went on to say that all the IPO proceeds would be used as working capital for the company and its subsidiaries.

The e-commerce firm raised around 21.9 trillion rupiah ($1.5 billion) from releasing 25.76 billion shares, or around 25 per cent of its enlarged capital, in its IPO late last month, hitting the upper end of its initial target, which was to pocket from 19.3-21.9 trillion rupiah.

Bukalapak’s IPO was the largest ever in the country, ahead of coal mining firm PT Adaro Energy’s 2008 IPO, which raised $1.3 billion.

The company raised the allotment for retail investors from 2.5 per cent to five per cent of the total available orders, thereby increasing the portion for retail investors from 547.5 billion rupiah to 1.1 trillion.

Bukalapak received a warm welcome on the stock market despite booking a net loss of 1.35 trillion rupiah last year. That was, however, 51.7 per cent less than in the year before.

The e-commerce company booked 1.35 trillion rupiah in revenue in 2020, up 25.6 per cent year-on-year from 2019, according to its financial statement.

Bukalapak is one six Indonesian unicorns, or start-ups valued at more than $1 billion. The IPO and the gains made on the first trading day have more than tripled Bukalapak’s valuation to around $7.6 billion from an estimated $2.5 billion before.

Other Indonesian unicorns are also mulling over plans to go public either through a local IPO, a listing abroad or a dual listing.

The IDX is working on regulations to make listings more attractive for local start-ups and, according to its own estimate, could add some 554 trillion rupiah to its market capitalisation if all unicorns went public in Indonesia.

Muhammad Candra Ashartanto, a 26-year-old from Surakarta, Central Java, said he had bought Bukalapak’s stock to “seize the IPO momentum”, as he had done with four other IPOs this year.

“Stocks like BUKA have good prospects in the long run despite the company still booking a loss,” he told the Jakarta Post on August 6, adding that he was interested in the company because it was the first e-commerce firm to go public.

Candra, a former manager at a retail store quit his job in March to become a full-time trader amid the pandemic, after learning the ropes of the market. He said he had bought Bukalapak’s shares through an investment app on his smartphone.

“But I think I will let go of my shares once Tokopedia goes public. I think Bukalapak’s value will change by then, and I would prefer Tokopedia, because its performance and fundamentals are better,” he added.

THE JAKARTA POST/ASIA NEWS NETWORK