08 July 2013, Mestika, Multipolar Set Share Prices for IPOs

Bank Mestika Dharma, a small-sized lender in Medan, North Sumatra, and Multipolar Technology, an IT company, set their prices for initial public offerings amid a trend of downsized share sales.

In a prospectus released on Monday, Bank Mestika said it would sell shares for Rp 1,380 each, in hopes of raking in Rp 593 billion ($59.9 million) from the IPO.

The IPO price was set at the lower end of its initial price range (Rp 1,370 to Rp 1,570 per share). However, the size of the IPO is about half of the original plan of 818 million shares, or 20 percent of the bank’s stake.

“That is all the demand,” Ferry Budiman Tanja, president director of Ciptadana Securities, told the Jakarta Globe when asked about the reason for the size cut. Ciptadana is the underwriter for the IPO.

The two-day offering starts today and the company is scheduled to debut its stock trading on the Indonesia Stock Exchange (IDX) next Monday.

The shares sold in this IPO are owned by Mestika Benua Mas, which controls 99 percent of Bank Mestika. The proceeds will go to the owner and not the bank. Meanwhile, the bank is in talks to sell 40 percent of its stake to RHB Bank from Malaysia.

Bank Mestika is one of many companies cutting their IPO size amid a decline in Indonesia’s stock market. Plantation companies Dharma Satya Nusantara and Austindo Nusantara Jaya, and investment firm Saratoga Investama Sedaya cut their IPOs in recent months.

The Jakarta Composite Index lost 4.3 percent in the May-June period.

Meanwhile, Multipolar Technology maintained its IPO size at 375 million shares, or 20 percent of its capital, the company said in a statement on Monday. The shares will be sold at Rp 480 each, which will give Multipolar Technology a total of Rp 180 billion in proceeds to help finance its expansion. The price came closer to the high end of its indicative price range.

The stock is being offered to investors until Wednesday and will be listed on the IDX next Monday. Ciptadana Securities is also the underwriter for Multipolar Technology’s IPO.

Multipolar Technology is controlled by Multipolar, an investment company owned by Lippo Group. Lippo also owns the Jakarta Globe.