International Capital Markets Newsletter - Winter 2021: Introduction to Indonesia Stock Exchange

Dechert LLP

Dechert LLP

The Indonesia Stock Exchange (“IDX”) lists an average of 30 companies per year, but this number is increasing, with 30 companies having already listed by September 2021. The IDX is an important player in Asian capital markets, boasting 713 listings as of January 2021, and one of the largest stock market values in the region. Indonesia is an emerging economic market that potentially presents higher risk to overseas investors, and so proposed changes to improve the IDX listing regime may attract more inbound investment in Indonesian companies. The IDX has typically seen more traditional sectors represented in its listings, with the January 2021 IDX Composite Report showing that listings were dominated by finance (37.1%), consumer non-cyclicals (16.4%), and basic materials (11.9%). Meanwhile, technology companies only accounted for 0.6% of total listings.

Proposed IDX Listing Rules Amendments

IDX and the Indonesia Financial Services Authority ("OJK") are considering amendments to the listing rules that will be designed to, among other things:

(i) relax listing criteria to allow more companies to be listed through the main board; and

(ii) allow for dual class share structures, which enables certain classes of shareholders to retain primary voting powers; a share structure that has conventionally been used in other capital markets for tech startups.

It is anticipated that such rule changes may facilitate the listings of more tech companies.

Indonesian tech companies will also likely be encouraged by Bukalapak’s recent IPO, which was the largest to ever occur on the IDX (see case study below). In previous years, technology companies did not tend to be the largest or most successful IPOs on IDX, but the success of Bukalapak may foreshadow a trend of further tech IPOs.

Case Study: Bukalapak

Bukalapak is an Indonesian tech company founded in 2010, specializing in e-commerce, digital finance and working with small to mid-size companies to enable them to gain an online presence. The company has grown rapidly and serves millions of small and mid-sized businesses as well as kiosk vendors, and independent “micro businesses.” After several rounds of funding, Bukalapak has in total secured nearly US$800 million from investors including Microsoft, sovereign wealth fund GIC, and Alibaba’s Ant Group. In August 2021, Bukalapak became the first of Indonesia’s ‘unicorn’ companies to be listed on IDX, with a US$6 billion valuation – the biggest IPO to occur do date on the IDX. Industry commentary has focused on the potential trends arising from Bukalapak’s success, namely with regards to tech as a growth sector. Its listing has been perceived as giving confidence to other Indonesian tech companies which might be considering going public.

Indonesian Tech Companies

The success of Bukalapak’s IPO in conjunction with proposed regulatory changes means that other Indonesian tech companies are likely to follow suit and seek IDX listing through an IPO, including potentially the unicorns Gojek/Tokopedia (e-commerce, ride hailing and other services), Traveloka (online booking), and OVO (payment services). In May 2021, Gojek and Tokopedia announced a mega-merger, creating ‘GoTo’ with a combined company valuation of US$25 – 30 billion. GoTo is backed by a large number of investors, including GIC and Alibaba Group Holding, showing a similar level of investor interest to Bukalapak before its IPO. This places GoTo in an ideal position to follow Bukalapak’s lead, and there are indications that they may do so in 2022. There are also early indications that smaller to medium-sized tech companies are following in the footsteps of Bukalapak, including RUN System, which offers enterprise resource planning (ERP) software solutions, and which listed in September 2021.

SPACs in Indonesia

The use of SPACs has been rare in Southeast Asia, and they have not previously been deployed on the IDX. However, SPACs are now beginning to focus on targets in Southeast Asian markets, and one notable example is Singapore’s Grab, which is contemplating a SPAC merger with Altimeter Growth that may value Grab at US$39.6 billion. As Indonesia’s IDX and tech market is both independently growing and nestled within the burgeoning Southeast Asia tech market, it is likely that SPACs will increasingly look to Indonesia to take local companies public.

Future Trends in Indonesia

The Southeast Asian tech market continues to grow, and a 2020 report by Google, Temasek and Bain & Company estimates that the region’s internet economy is expected to triple to reach a value of US$300 billion by 2025. Indonesian capital markets are now very much focused on tech listings, and market commentary indicates that Bukalapak has laid the groundwork for further activity in this space.


Dechert will continue to closely monitor developments with the SPAC market in Asia and in the Indonesian capital markets, and share any updates when available.

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Dechert LLP

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