Amid the market conditions which are still volatile due to the global crisis which is not yet over, PT Sido Muncul will conduct an Initial Public Offering (IPO) in the second half of this year.
The desire of Sido Muncul to release shares to the public could not be separated to the desire of the family company to entre the capital market. Being a public company will make it easier to obtain financing from the public. PT Sido Muncul, the largest herbal medicine company, is eyeing funds from the divestment of between Rp1 to 1.5 trillion.
PT Kresna Graha Sekurindo, Tbk (KREN) has been appointed to handle the IPO plan of Sido Muncul. “We will handle the IPO of Sido Muncul with a value of about Rp1 to 1.5 trillion”, said president Director of Kresna Graha Sekurindo, Michael Steven, at the Indonesia Stock Exchange (IDX) building on Monday (July 1).
He explained that the shares that will be released to the public is 20 percent, while the time of the implementation of IPO is in the second half of this year. Kresna also targets an underwriting value of Rp.3 trillion of initial public offerings (IPO) of shares of a number of issuers this year.
Michael Steven is optimistic that the IPO of Sido Muncul will be absorbed by market, especially by domestic investors. However, overseas road shows will be performed if necessary. He will prioritize domestic investors. But, foreign share is also allocated, because Sido Muncul also wants its shares to be known by world investors. However, Michael did not want to explain where the overseas road shows will take place.
Kresna is also working on IPO plans of four other companies engaged in real estate automotive oil and gas, and financial services sectors. “This year, we handle the IPO of about five companies with emission value of around Rp.3 trillion “, said President Director of Kresna Graha Sekurindo, Michael Steven, after the company’s annual shareholders meeting in Jakarta on Thursday (June 20).
In addition to IPO underwriting, kresna handles underwriting to stock emission related to rights issue. One of them is the rights issues of PT Bank Nusantara Parahyangan worth Rp.30 billion. “This year, we are pursuing more stock underwriting because it is more profitable than bonds”, said Michael.
For this year, Kresna targeted revenue at Rp.146.5 billion or an increase of 20% compared to 2012 at Rp.122.08 billion. Target of net profit doubled from a year ago. In 2012, the company reported a net profit of Rp.10.14 billion.
To Build a Factory
Related to Sido Muncul IPO plan, President Director of Sido Muncul, Irwan Chandra, said that the company plans to conduct an initial public offering, but not yet been able to tell further. From the IPO, Sido Muncul hopes to reap funds as much as Rp.1 – 1.5 trillion. “Proceeds from the IPO will be used for expansion, plant expansion, and working capital”, he said.
Currently, Sido Muncul has two factories located in Semarang, and plans to increase the plant capacity two-fold. He said that the IPO is still on track in September, while the plan’s capacity will be increased two-fold. With the addition of this plant, Sido Muncul plans to penetrate market in eastern Indonesia. “We will expand market in Eastern Indonesia, such as Makassar, Irian Jaya, Maluku, and East Nusa Tenggara”, Irwan said.
The plans to go public have been matured by improving products quality, increasing revenue, marketing expansion and family approval given that the national herbal medicine company belongs to a family. Irwan Hidayat said that the company plans to release 10 percent stake and has entered the final stage.
Irwan said that the internal process has been complete, both family consent, assessment and looking at the sexiest market trend in 2013. The company plans to sell 10 percent of its shares, with a nominal value of Rp.1,000 per share. Sido Muncul is growing rapidly, even throughout 2012, the company which has its base in Bargas Village, Semarang Regency, has experienced an increase in revenue by 60 percent from the previous year.
Irwan Is optimistic that the shares will be absorbed by market and he will prioritize domestic investors because Sido Muncul products are well known in the country. However, exports will be enhanced in the future. “Our exports are 5 percent to the United States and Europe”, Irwan said.
Meanwhile, Business Development Manager of PT Sido Muncul, Maria Reviani Hidayat, said that the IPO proceeds would be used for the development of herbal medicine industry, industry development consists of the core business areas, namely herbs and food division (food division). In the food division, Sido Muncul also producer beverages. “It’s called functional food”, she said.
Maria refers to Sido Muncul Ginger Coffee as one of the Functional food. It means that the product is not just a drink to quench your thirst. It was the same products from the same division for preventing heartburn. (E)
Business News - July 05,2013