Not all companies you can buy shares in the Indonesian Stock Exchange, Traveloka, for example, although it is reported to be listed soon, but at the time of writing this article. The general public cannot buy shares of travel agents.
Because in order to receive funds from the public through the Indonesian Stock Exchange. The company must go through a process known as Initial Public Offering (IPO) Also known as changing the company’s form to a public company (go public) first, and to do this IPO requires many conditions. Here’s the full discussion:
What is GoPublic?
Going public is another word for Initial Public Offering (IPO). This term is used to describe stocks of companies that previously could only be owned by individuals. Can currently be owned by individuals (public).
must know according to the Act No. 40 of 2007. Limited Liability Company (PT) can be formed by 2 persons or by two parties. Both parties must have shares in the company. These shares can be traded restricted to relatives or colleagues. At this stage, the company is said to be a closed company or a private company.
A company can be said to be public or can be said to be open (Tbk) if its shares or other securities are freely traded on the Indonesian Stock Exchange. before reaching this point The company has to go through a process known as Initial Public Offering (IPO).
Benefits of IPO Companies
In addition to changing status from private In addition to becoming a public (private company) public (public company), the IPO process is useful for:
1. Increase funding sources
IPOs are generally conducted by companies. to increase capital so that they can run their business smoothly in the future This is done because stocks are freely sold on the stock exchange, there will be a large number of investors who will be able to buy them. Funds from these shares are later used by the entity to increase cash flow.
2. Increase brand awareness
when it became a private company (private company) The number of people who know your company name may be limited to certain people, such as employees, governments, partners or consumers of your products. However, after the IPO, your brand or company name will be better known to the public.
This is because your company name will appear more often on relevant websites. capital marketSuch as e-IPO pages, IDX official pages, economic news sites, etc. In addition, when conducting an IPO, companies must conduct large-scale publicity. The purpose is to let the public know that the company is about to do an IPO.
3. Add professionalism
One of the risks faced by publicly listed issuers is the high level of publicity of the company’s operating activities. On the one hand, this increases brand awareness in the public eye. but vice versa This requires companies to be more transparent and professional in their work.
Due to being listed on the stock exchange, companies are obligated to report their financial and operating conditions. Not only to IDX, but to the broader community as well. The professionalism of the company must also be increased.
4. Possibility of withdrawal for founders
by being listed on the stock exchange A business founder can sell all of his shares in the company he founded if he really wants to. Even having a company listed on the stock exchange does not mean that the company’s founder has no other desires. Therefore, listing on the stock exchange makes it easier for him to sell shares at any time at the prevailing market price.
5. Increase credibility in the eyes of stakeholders
Stakeholders are individuals or parties directly or indirectly related to the company. Stakeholders are not just shareholders. But also governments, banks, employees and even consumers.
For banks, its status as a public company go makes it easier to analyze the financial quality of a company. As a result, it is easier for these companies to obtain credit.
for employees Public company status gives them easier access to company stock prices. So when an employee stock option plan (ESOP) is offered, it’s easier for them to agree. It is commonly used to maintain employee loyalty.
Requirements for a Go Public Company (IPO)
The following are the filing requirements that companies must meet when conducting or undergoing an IPO process:
- A juristic person in the form of a limited company (PT)
- There are independent directors not less than 30% of all directors.
- There is at least one independent director out of the total number of directors.
- There is an audit committee and an internal audit unit.
- have a company secretary
- It has been active for more than 1 year (development board) and 3 years (main board).
- Have at least a profit in the past 1 year. This condition only applies to companies that wish to register their name on the main board. As for companies that want to be listed on the development board, there will be some convenience.
- Audit financial statements 1 year (development board) and 3 years (main board)
- Get unqualified opinions.
- More than 5 billion tangible assets (development board) and 100 billion (main board).
- The number of shares held by controlling investors and major shareholders is 300 million shares (main board) or 150 million shares (development board).
- The above non-controlling shares must equal 10% -20% of the total issued shares. The size of this share ratio is determined by the number of shareholders’ equity registered by the company.
- The number of shareholders is 500 divisions (development board) and 1000 divisions (main board).
Processes and Procedures to Become a Go Public Company
The following is the process and procedure for becoming a Go Public Company in the Indonesian Stock Exchange:
- Document preparation process. in this process The company will be assisted by a team of experts and support specialists.
- Submission of letter requesting a preliminary agreement for listing shares with IDX & KSEI
- A preliminary agreement to list shares was received from IDX after the institution received the complete submission requirements document. Visit the company in person and was presented by the company
- Submitting a registration statement to the KMITL.
- OJK allows the prospectus to be issued after the institution has reviewed the previous documents and processes.
- prospectus and book making period.
- Submitting price information and other disclosures to OJK.
- OJK Produces Effective Statement Letters
- Prospectus Update Announcement
- Submission of share registration application to IDX
- The process of offering for sale and allocation to the public This process includes refunds to investors who pre-ordered shares in the account creation process but were not allocated.
- Done dealing with IDX.
- The stock is officially listed on the stock exchange.
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