Zakaria, Finance Director at Wika Gedung, confirmed that the company has issued a tender to obtain an underwriter for the IPO. This tender process will require at least two more months and therefore the listing of Wika Gedung on the Indonesia Stock Exchange will most likely occur somewhere in the first half of 2017. Reportedly, several securities companies have already expressed their interest to become underwriter in this IPO. These include Mandiri Sekuritas, Danareksa Sekuritas, and Bahana Securities.

Wika Gedung Finance Director Zakaria also informed that the company will use 60 percent of the IPO proceeds for further business expansion, while the remaining 40 percent will be used for working capital.

This year, Wika Gedung targets to collect net profit of at least IDR 140 billion (approx. USD $10.7 million), an upward revised target from the company's earlier project pf IDR 119 billion in net profit in full-year 2016.

Besides its activities as constructor, Wika Gedung is also engaged in so-called strategic property projects. Some notable examples are Tamansari Tera (Bandung, West Java), Tamansari Mahogany (Karawang, West Java), Tamansari Prospero (Sidoarjo, East Java), and Tamansari Urbano (Bekasi, West Java).

Given that the government of Indonesia is eager to push for infrastructure development in Indonesia - and Wika Gedung is closely connected to the government as its parent company Wijaya Karya is a state-controlled company - investors should be interested in this IPO. With economic growth estimated to accelerate beyond the 5 percent (y/y) level, there is plenty of demand for high-rise property projects (particularly apartments and office space) in the bigger cities of Indonesia.

Although, generally, Indonesia's property sector is still facing a difficult period, there are some factors that give rise to optimism. For example, the interest rate environment of Indonesia has been cut gradually, yet aggressively, by Bank Indonesia over the past year. Secondly, part of the fund repatriations under Indonesia's tax amnesty program is expected to be injected in Indonesia's property sector.

Wika Gedung was established on 24 October 2008. It has an authorized capital of IDR 200 billion and issued and paid up capital of IDR 50 billion. Wijaya Karya owns 99 percent of the shares of Wika Gedung, the remaining 1 percent being owned by the Wika Employees Cooperative.

Read more: Initial Public Offerings (IPOs) on Indonesia Stock Exchange in 2016