Multipolar Technology, an information technology company and the wholly owned subsidiary of Multipolar, seeks to reap funds between IDR 160 and 188 billion (USD $16.2 to $19.0 million) through an initial public offering (IPO) on the Indonesia Stock Exchange (IDX) to finance its expansion plans. The company will offer 375 million shares, or 20 percent of its stock capital, to the public for a price between IDR 425 and 500 per share. Multipolar Technology provides IT hardware and infrastructure, software and business solutions, and consultancy services.
According to John Teja, director of Ciptadana Securities (which acts as underwriter of Multipolar Technology’s listing), the IT company’s price to earnings ratio (PER) currently stands at 12.6 to 14.6 times, which can be labeled as average compared to other companies in the same sector. For example, Astra Graphia has a PER of 20 times, while Metrodata’s PER stands at six times. The PER ratio of Indonesia’s main index (IHSG) is currently about 16 times.
Multipolar Technology’s net profit in 2013 is expected to result in IDR 58.5 billion (USD $5.9 million), a 107 percent jump from 2012, mainly supported by recurring contracts. Revenues in 2013 are estimated at IDR 1.6 trillion (USD $161.9 million), a 20.3 percent increase from last year.
First offering of Multipolar Technology’s stocks will be conducted between 17 and 21 June 2013, public offering on 1 and 2 July 2013, and listing on the IDX on 8 July 2013. After the IPO, the new shareholders structure will be as follows: its parent company Multipolar will have 79.99 percent (from 99.98 percent), Tyrane Saptajagat will own 0.01 percent (from 0.02 percent), and the remaining 20 percent will be in the hands of the public. Proceeds from the IPO will be used for capital expenditure and debt repayment (to its parent company Multipolar). Budgeted capital expenditure for this year amounts IDR 93.4 billion (USD $9.5 million), which will originate from the IPO and from the company's internal cash reserves.
IT spending in Indonesia is expected to remain strong in the years ahead according to Welianto Halim, director of Multipolar Technology. He mentioned expected growth of 46.3 percent in IT spending by consumers in the next three years. This includes the purchases of servers, personal computers, consulting services and software. The largest customers of Multipolar Technology come from the banking, telecommunications and manufacturing sectors. Large spending on IT systems by Indonesian companies is what supports a significant proportion of Multipolar Technology’s revenues. Bank Mandiri, Indonesia’s largest financial institution by assets, accounted for approximately 14 percent of Multipolar Technology’s revenue in 2012.