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Bukalapak Jumps 25% on Debut After Indonesia’s Biggest IPO

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Online marketplace PT Bukalapak.com surged on its first day of trading after raising $1.5 billion in Indonesia’s biggest-ever initial public offering.

The shares jumped 25% from its initial offer price of 850 rupiah (6 U.S. cents) in Jakarta. The increase hit the upper limit that triggered the bourse’s automatic rejection, with the price staying at 1,060 rupiah as of 10:12 a.m. local time.

A successful debut by Bukalapak sets the tone for other regional tech giant IPOs. Indonesia’s GoTo, created through a merger of ride-hailing giant PT Aplikasi Karya Anak Bangsa, known as Gojek, and e-commerce company PT Tokopedia, is seeking to be valued at up to $30 billion by offering shares before the end of the year. PT Traveloka Indonesia and Singapore’s Grab Holdings Inc. aim to go public via blank-check companies as soon as this year.

In Jakarta, three-fourths of the 44 companies that listed during the past 12 months ended their first session at least 25% higher.

The IPO “will be an important milestone for Indonesia’s capital market to promote future unicorn listings domestically,” said Henry Wibowo, head of research at PT JP Morgan Sekuritas Indonesia. Bukalapak’s gross merchandise value, the total amount of goods sold on its marketplace, can reach $12 billion next year from an estimated $9 billion in 2021, which makes its $6 billion IPO valuation attractive compared with regional peers, he added.

Investors’ response to the IPO also reflects increased interest in e-commerce companies, which are thriving despite mobility restrictions put in place to curb the pandemic. Bukalapak, which counts Microsoft Corp. and Jack Ma’s Ant Group Co. among its backers, doubled the retail’s pooling allocation to 5% or about 1.1 trillion rupiah, according to the company.

Bukalapak still made a loss of 323.8 billion rupiah in the first quarter, compared with 393.5 billion loss a year earlier, according to the prospectus. It expects to turn profitable within three years, President Teddy Oetomo said in an interview with Bloomberg Television’s Haslinda Amin on Friday.

“We are currently tracking well in our path to profitability,” he said, adding that he expects the stock to move to the exchange’s main board in the near future once it is no longer loss-making.

Today’s debut gain pushes Bukalapak’s valuation to 109 trillion rupiah, according to Bloomberg data, placing it among the market’s top 15 companies.

(Updates with company comments in penultimate paragraph.)

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