Take Advantage of the Momentum. The story goes, we are in the process of Going Public /IPO of one of the subsidiaries. After the kick off meeting with all supporting professions, we were faced with a choice of restructuring methods: choosing which entity to use as an issuer, as well as what is the right structure.
By: AM. Sadat
It’s quite complex because you have to consider a lot of things. Starting from the best business model for the company, the highest valuation for shareholders, benefits for stakeholders, consideration of tax potential/consequences, the most efficient acquisition and/or merger process, to the most reasonable time.
Often deciding on something like this takes up to 1 or 2 months because you have to consider many things and consult with many professions. But it turned out that we were able to decide in just 2 weeks.
How come?
Thanks to Zoom meetings. Where we can meet and coordinate at any time, with flexible time. Several meetings were held with relevant parties who were outside the city and even abroad. Meetings can still be held, information is obtained, and decisions can be made. I imagine how complicated it would have been if we had done this IPO process 2 or 3 years ago.
The pandemic has forced us to understand with limited conditions. Suddenly everyone is familiar with video conferencing, and we are used to studying, editing and sharing documents online. We become accustomed to drawing conclusions or decisions through video conferencing. What used to seem to be “legitimate” when done with face-to-face meetings.
With the brevity of several decision-making processes, we are optimistic that we can complete this IPO process within 6-8 months as we planned. God willing. Much shorter than usual which takes up to 1 year, even more.
This is one of the blessings of the pandemic. Or to be precise, it’s a blessing to be able to take advantage of the momentum of the pandemic.
Actually, the decision to speed up Going Public – which was originally planned for 2025 – to this year is also a blessing of the pandemic. Results take advantage of the momentum as well. Due to the pandemic, some of the funding alternatives that we originally relied on for company expansion were not achieved, so the Management was forced to rack their brains, until finally found a solution to Go Public through this IPO. Quite a desperate choice. But we’re confident because we feel pretty ready. It is not a big IPO because its value is below 50 Billion (Development Board), but it is still a great achievement for the company.
Some capital market practitioners stated that an IPO during this pandemic was the right choice because of the large amount of funds that poured into the Indonesian capital market. As evidenced by the return of the value of the JCI to pre-pandemic levels, and the increase in local investors to 3.8 million (up 50% or greater than the addition of the last 4 years), and the increase in daily transactions in the capital market reached 9T or an increase of 32% compared to the previous year. In addition, Indonesia also recorded the most IPOs in Southeast Asia by recording 51 new issuers throughout 2020.
For the company, this IPO process is finally used as a momentum to simultaneously improve the operational system that we have seriously managed for the last 2 years. At the same time, the company has also managed to record some great achievements over the past year. Which eventually all created momentum, along with the change in status to a public company.
As we know, business success is largely determined by factors such as business ideas, capital, team/execution, business models and momentum. And among them all, the ability to take advantage of momentum is the factor that can most boost success. Only followed by team / execution factors, business model, capital, new ideas. Momentum is the meeting point of opportunity with readiness.
Of course, there are many ways to take advantage of the momentum – including the momentum of this pandemic. For us in Asiavesta Group, one of the things we will do is to IPO 2 subsidiaries at once this year. God willing. This is in line with our mission to develop subsidiaries exponentially, one of which is through the capital market. Hope it goes well. Amen.