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INITIAL PUBLIC OFFERING (IPO) - JAKARTA. GoTo surged as much as 23% in its stock market debut on Monday after Indonesia's largest tech company raised $1.1 billion in a keenly watched IPO, fuelling expectations of more offerings from the sector in Southeast Asia's largest economy.
The initial public offering (IPO) is the world's fifth-largest this year, Refinitiv data showed, and came despite many companies delaying launches due to the Russia-Ukraine war, rising interest rates and economic uncertainty.
PT GoTo Gojek Tokopedia Tbk was formed by last year's merger of ride-hailing-to-payments company Gojek and e-commerce leader Tokopedia, with its businesses straddling millions of small and mid-sized firms across the archipelago.
"There was no perfect timing for this IPO, but our focus was on Indonesia, with a local investor audience," GoTo's CEO Andre Soelistyo, a former private equity banker who steered Gojek's push into consumer services, told reporters.
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The strong listing is a boost especially for tech giants backing GoTo, including SoftBank Group's Vision Fund 1 and Alibaba Group Holding Ltd, who have been battered by the global market rout since late 2021.
It also affirms the attractiveness of the $70 billion digital market in Indonesia, where record venture funding is creating a wave of startups.
"GoTo's IPO is a watershed moment for Indonesia," said Joel Shen, head of Asia technology at global law firm Withers. "With millions of users, drivers, and merchants, there's no company that's more plugged in to Indonesia's digital economy," he said.
GoTo's shares rose to as much as 416 rupiah ($0.0290) minutes after trading began. It priced the IPO at 338 rupiah per share, the high end of an indicative range.
The shares, which were sold only to investors in Indonesia, unlike most other offerings, later traded at 400 rupiah. It became Indonesia's third most-valuable listed firm at $33 billion, after Bank Central Asia and Bank Rakyat Indonesia, and just above Telkom Indonesia's $31.6 billion value.
"I hope that GoTo IPO will motivate our young generations to give new energy for Indonesia's economic progress," Indonesia President Joko Widodo said in a video message at the listing ceremony, which kicked off with a video of GoTo's senior leadership in Gojek driver uniforms riding in-house Electrum brand electric motorcycles.
RECORD JAKARTA STOCK MARKET
Against a backdrop of sharp declines seen in U.S.-listed peers Grab Holdings Ltd and Sea Ltd which operate across Southeast Asia, GoTo's valuation and size were lower than expected. All three loss-making companies are under pressure to turn around near-term.
GoTo's main focus is Indonesia, where the digital economy is forecast to grow nearly five times to up to $330 billion by 2030 from 2021.
It boasts 2.5 million drivers, 14 million merchants and 55 million annual transacting users, and also has small operations in Singapore and Vietnam.
GoTo's IPO benefited from a booming local market, with Jakarta's main index rising 1% to a record on Monday, taking gains to 11% so far this year and making it Asia's best performing market.
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It sold only about 4% of its shares in the IPO. GoTo is the first domestic firm to issue multiple class voting shares and tap new rules allowing unprofitable firms to list directly on the bourse's main board.
And unlike the case of smaller e-commerce firm Bukalapak , which raised $1.5 billion in its IPO last year, all investors in GoTo are subject to an eight-month lock-in, or two years for those with multiple class voting shares. Bukalapak's shares have more than halved after making a strong debut.
GoTo broadened its investor base by allocating shares to 600,000 drivers and said a record 300,000 investors participated in the IPO.
Other Indonesian startups eying local IPOs included Binance-backed crypto firm TokoCrypto and online booking travel company Tiket.com, sources told Reuters. Both firms were not immediately reachable for comments.
"Many Indonesian startups are watching today's IPO closely and I expect we will see a wave of other Indonesian tech IPOs going forward," said Shen from law firm Withers. ($1 = 14,368.0000 rupiah)
