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Road to IPO

02

Initial Public Offering or IPO is a corporate action in which a portion of the company’s shares are released for the first time and sold to the public so that shares are no longer controlled by the private sector.

What is an IPO? What is an IPO for?

Access to market for additional capital with a relative low cost

Accelerate company’s growth and increase the company’s value

Improve company’s reputation and tax incentives

Initial Public Offering

03

Access to capital Spotlight

Pros and Cons for an Initial Public Offering

Efficient access to capital on an ongoing basis• Liquidity of shares• Increased prestige and reputation• Good Corporate Governance (GCG)• Attract and retain key personnel• Potential reduced tax rate

• Transparency of information to public• Dilution of control and reduced autonomy

– Pressure for (short-term) performance – Ongoing expenses to comply with listed

company obligations

04

2019 Trade Value and Market Capitalisation per Industry Sector

Total Trade Value(IDR trillion)

MiningIDR 226 (10%)

AgricultureIDR 33 (1%)

Basic IndustryIDR 198 (9%)

TradingIDR 352 (16%)

Other Industries

IDR 125 (6%)FinanceIDR 606 (27%)

Consumer Product

IDR 182 (8%)InfrastructureIDR 259

PropertyIDR 246 (11%)

Market Capitalisation(IDR trillion)

MiningIDR 359 (5%)

AgricultureIDR 93 (1%)

Basic IndustryIDR 774 (11%)

TradingIDR 687 (9%)

Other Industries

IDR 371 (5%)FinanceIDR 2,540 (35%)

Consumer Product

IDR 1,170 (16%))InfrastructureIDR 795 (11%)

PropertyIDR 471 (7%)

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05

Increasing Numbers of Listed Companies in IDX

41141623

1

2

3

8

1

0

3

5

2

2

1

3

5

1

0

2

0

1

2

4

42

0

0

2

0

9

7

6

44

0

7

4

0

Listed companies per sector 2014 –2019

4 10 3 2 5515 0 0 0 21Listed companies per sector FY2019

Total Listed companies in IDX FY19

3

2

21

15

15

4

0

0

0

5

9

4

4

9

3

15

8

0

Consumer products Industrial products Energy and resources Financial institution Property Healthcare Public sectors Technology, Media, and Telco Trading

2014 2015 2016 2017 2018 2019

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06

IPO Journey

07

Pre-IPO

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Financial Readiness Have you built a sustainable business position?

StructureHave you achieved an optimum shareholding and corporate structure?

Growth StoryHave you established a robust and strong business plan?

TaxHave you obtained the most efficient tax planning and identified historical tax health?

Governance & AccountingHave you established a sustainable governance and financial reporting infrastructure?

LegalHave you run the business in compliance and adhering with the applicable laws and regulations?

Click here to go back IPO Journey

08

To obtain an optimum and sustainable business position, you need to…

• Evaluate the pricing strategy and revenue driver of the company

• Assess the company’s key and core costing elements • Measure the company’s profitability margins and

historical performances to industry peers • Analyse the company’s working capital, asset

optimisation and cash-flows movement • Evaluate the company’s equity and liability position

Financial Readiness

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To obtain a robust and strong business plan, you need to…

• Determine the company’s strengths, weaknesses, opportunities and threats in the industry

• Evaluate the company’s business plan and future initiatives

• Expand business’ scalability, coverage and product/ service portfolio by organic and inorganic route

• Assess historical capex realisation and improve future investment plans

Growth Story

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To achieve a sustainable financial reporting and governance infrastructure, you need to…

• Obtain audited financial statements under PSAK • Evaluate the adequacy of financial reporting resources

and infrastructure • Enhance efficiency in financial reporting and closing

procedures • Create new corporate governance structures • Enhance business processes and internal controls

Governance & Accounting

11

$To achieve an optimum shareholding and group structure, you need to…

• Prepare an optimum shareholding structure for future initiatives

• Evaluate the core business of the company and its subsidiaries

• Assess the company and its subsidiaries’ financial performance (cash-flow) to the overall structure

• Map the company and its subsidiaries’ assets ownership and identify idle assets

Structure

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TAXTo obtain the most efficient tax planning, you need to…

• Identify the most efficient structure: – Merger or spin-off using book value possibilities – Debt to equity swap or reducing debt to equity ratio 4:1 – Dividend tax structure – Potential tax facility or holiday (for post) under strategy

• Conduct tax health check to identify potential tax exposure and historical tax compliance

• Expand the succession planning especially for taxation, to obtain robust legacy

Tax

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To adhere with the relevant laws and regulations, you need to…

• Identify potential legal issues that may cause impediments to the IPO process

• Evaluate the company’s limitation and regulatory restriction on carrying out its business

• Ensure the legal standing and the validity on the company’s corporate and operating licenses

• Identify corrective actions plan from non-compliance

Legal

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Supporting Professionals

ListingStructure

Due Diligence

Tax & Legal

Internal Approval & Documentation

Roadshow & Book-building

Financial Position

Others

IPO Execution

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Tax

Click here to go back IPO Journey

15

To start the execution process, the company has to appoint supporting professionals, such as…

• Notaries • Underwriters • Auditors • Legal Advisors • Share Registrar-Biro Administrasi Efek • Appraisal (assets-heavy company) • Industry Expert(s) • Public Relations

Supporting Professionals

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$ To provide a better understanding of the company:

• Collate and prepare data for due diligence process (data room)

• Perform management presentation to underwriter and Indonesian Stock Exchange (“IDX”)

• Conduct and coordinate site visits plan for third parties (i.e. underwriter, Indonesian Stock Exchange and etc.)

• Facilitate Q&A process from third parties

Due Diligence

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To avoid inadequate approval documentations requirement, the company shall…

• Fulfill Indonesian Stock Exchange (“IDX”) requirements in relation to Good Corporate Governance and internal control

• Obtain the relevant approval from shareholders through the extraordinary general meeting of shareholders approving the changes in article of association and capitalisation of the company upon the effective of IPO

• Prepare relevant documentations for the registration to IDX, OJK and other relevant regulators

Internal Approval & Documentation

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To avoid inadequate approval documentations requirement, the company shall…

• Finalise the company’s audited financial statement for the last 3 financial years for main board, 1 year financial year for development board and acceleration board

• Obtain comfort letter from the auditor or external auditor • Publish a pro-forma financial statement of the company

post-IPO • Finalise and present the company’s financial projection

to underwriter and facilitate follow-up Q&A

Financial Position

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To present a clear vision on the listing:

• Finalise the size free float share of the company upon the effective of IPO

• Finalise the listing structure in the preferred stock market • Determine the ESA/ ESOP allocation • Development the company’s investment thesis and equity

story • Determine the use of proceeds of IPO as well as the

dividend policy and lock-up period, etc • Explore the potential of secondary offering upon the

effective of IPO

Listing Structure

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TaxTo enhance the company’s tax and legal standing:

• Ensure the completeness of business permit and licenses performed by legal advisor

• Prepare of relevant requests, waivers and/or notifications to third parties such as creditors, employees, etc.

• Select most suitable tax imposition (capital gain tax or final tax for founder shares)

• Obtain tax and legal compliance opinion from tax and legal advisor

Tax & Legal

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To increase the company’s public awareness, the company led by the underwriter shall…

• Perform a soft-tapping on prospective investors to gauge interests and tractions

• Perform a Pre-Deal Investor Education (PDIE) • Finalise the research report and analysts report • Perform road show and book-building on the

available free-float market shares • Finalise the pricing and allocation of investors

Roadshow & Book-building

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Remaining items as important as the others:

• Finalise asset appraisal report from a licensed appraisal (if there are any other non-equity capital injection)

• Finalise appraisal opinion on the independent business continuity (if required)

• Appoint media and communication plan for press release and media handling

• Assess risk factors and consideration before finalisation of listing process, which includes but not limited to macro-economic, political, etc.

Others

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Strategy How do you continuously develop your core functions and maximise your existing strengths?

ExpansionHave you established an optimum financing road-map to support your expansion and investment plan?

DefenseHave you established strong governance to optimise your resources and technology, protect your reputation and manage stakeholders interest?

Post-IPO Click here to go back IPO Journey

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• Uphold the company’s unique selling point and strengthen its competitive advantage

• Overcome business challenges to drive transformational change within the company

• Execute well-developed strategies to achieve significant milestones and new market

• Obtain the tax facility of corporate tax reduce rate and future dividend exemption

Strategy

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• Ensure the funds raised during IPO has been utilised in accordance with the prospectus and has contributed to the growth of the company

• Assess internal cash-flows adequacy from operation to measure the company’s feasibility to fund targeted expansion initiatives

• Evaluate and identify organic and/or non-organic expansion options to further support the company’s position and growth

• Evaluate the funding alternatives through equity (i.e. strategic partnership, investors, rights issue, etc.) and/or debt instruments (bond issuance, bank loans, etc.)

Expansion

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• Manage risks and strengthen internal control to assure effectiveness & efficiency of strategy execution

• Implement continuous improvement initiatives (organisation structure, business process and talent) to attain competitive advantage

• Adopt technology (digital, automation and big data & analytics) to strengthen corporate governance and business operations

Defense

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OJK-List of document for Effective Statement1. Introduction letter for IPO registration (stamped)2. Initial prospectus3. Brief prospectus4. Initial schedule for public offering by the shareholders5. Sample specimens, stock purchase order form, stock purchase order list, confirmation of allotment and collective share certificates6. Declaration of the purpose of using IPO fundsIssuer’s statement about the completeness of documents7. Statement of dividend policy8. Letter of sufficiency of fund of Underwriter and a letter of support from the Bank9. Curriculum Vitae of the Board of Directors and Commissioners10. Declaration letter from each Board of Trustees and Directors has good character and morals according to Bapepan11. Regulation No. IX.I.612. Statement letter from the Company, Board of Directors and Board of Commissioners involved or not involved in any lawsuit13. Specimens’ signature of Issuers and Capital Market Advisors14. Statement of professionalism from the Underwriter15. Statement of professionalism from the advisors & registered certificates at OJK16. Decree of the Board of Directors regarding the establishment of the internal audit unit and the charter of the internal auditunit17. Decree of the Board of Commissioners regarding the establishment of the Audit Committee and the Audit Committee Charter18. Copy of appointment letter of Corporate Secretary19. Copy of NPWP & KTP of the Company, Directors and Commissioners20. Copy of articles of association and amendments21 Copy of Company domicile, Business License (SIUP), Company Registration Certificate (TDP), NPWP and SPKP22. Company’s business plan 23. Financial projections in 3 (three) years24. Audited financial statements by Public Accounting Firm25. Audited financial statements of subsidiaries by Public Accounting Firm26. Tax return for the pas 3 (three) years27. Comfort Letter28. Representation letter 29. Legal opinion30. Legal audit31. Copy of agreement with Underwriter32. Copy of agreement with Share Administration Management33. Copy of preliminary registration agreement with IDX34. Copy of share registration agreement at Collective Custody

Click here to go back Internal Approval & Documentation

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IDX-List of document1. Registration statement letter from the Company2. Deed of establishment / articles of association of a prospective listed company which has been ratified by the competent authority and all amendments3. Company Registration Certificate (TDP), NPWP and statement of domicile4. The organisational structure of prospective companies is listed up to officials one level below the Board of Directors5. The Group’s organisational structure that shows the position of prospective companies is listed in the Group6. Latest Curriculum Vitae (along with KTP and NPWP) of each member of the Directors and Commissioners signed by the person involved7. List of Shareholders including the number and percentage of ownership along with any changes within the last 3 (three) years8. List of share ownership and business relations of the Directors, Commissioners and their families both in prospective listed companies whose operational period is less than 3 (three) years9. Audited financial statements for the last 3 (three) financial years or audited financial statements since the operation of prospective listed companies with an operational period of less than 3 (three) years10. Brief history of the Company11. Description of the Company’s business activities12. Analysis and discussion by management about business activities, performance and financial position13. Analysis of business risks and business prospects14. Financial Projections at least 3 years including the assumption and feasibility study for the Company15. The purpose of using the funds from the public offering16. The number of shares offered and the estimated offer price17. A description of the number of shares listed18. Dividend policy19. Transactions / agreements, receivables and obligations with affiliates (including amounts and conditions)20. Receivables of prospective registered companies guaranteed by affiliated parties, and / or third party debts or affiliated partydebt guaranteed by prospective registered companies21. Summary of contracts that are material in value22. Performance, operational, growth, liquidity and solvency ratios23. Legal opinion by a Legal Consultant registered in OJK24. Proof of payment of the registration fee25. Securities administration management contracts with Securities Administration Agencies or statements from prospective companies are recorded if the Securities administration is managed on its own26. Copy of appointment letter of the Corporate Secretary27. Statement of salary and benefits for Commissioners and Directors28. Declaration of having an Independent Director & Independent Commissioner29. Copy of appointment letter of Independent Commissioner & Independent Director30. Decree of the Board of Directors regarding the establishment of the Internal Audit unit and the Internal Audit unit charter31. Decree of the Board of Commissioners regarding the establishment of the Audit Committee and the Audit Committee’s charter32. A statement regarding the fulfillment of the qualifications of the Directors and Commissioners33. Issuer’s signature specimen and Company seal34. Power of attorney for officials and authorised officers 35. Management Letter36. Declaration of responsibility for the accuracy of information submitted to IDX and willingness to comply with IDX’s rules andregulations in the Capital Market

Click here to go back Internal Approval & Documentation

29

Contact us

We have our experienced specialist across Deloitte, please do not hesitate to contact us for more information about our services.

Rosita SinagaAssurance Services Partnerrsinaga@deloitte.com

Joe LaiTechnical AdvisorAssurance Advisory Servicesjoelai@deloitte.com

Edy WirawanFinancial Advisory Leaderewirawan@deloitte.com

Roy Tedja SidhartaBusiness Tax Partnerroytedja@deloitte.com

Bing HariantoDeloitte Private CMOBharianto@deloitte.com

BudiyantoRisk Advisory Executive Directorbudiyanto@deloitte.com

Cornelius B. JuniartoLegal Senior Partnercbjuniarto@deloitte.com

Henry Arnoldi AsrilCorporate Finance Partner M&A and IPO Advisory Services Leadhasril@deloitte.com

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