Eka Sari Lorena, an Indonesia-based transportation company, is the next company that will conduct an initial public offering (IPO) on the Indonesia Stock Exchange in order to gain funds for further business expansion. Last year, Eka Sari Lorena was denied to go public as it did not get approval from market regulators. After securing approval this year, the company offers 150 million shares (43 percent of its enlarged equity) in an IPO which starts today (01/04). Its listing on the Indonesia Stock Exchange is scheduled for 15 April 2014.
For the IPO, the price of one Eka Sari Lorena share is set at IDR 900 (USD $0.08). The company targets to raise IDR 135 billion (USD $11.9 million) through the IPO. About 81 percent of these proceeds will be used for the purchase of a new bus fleet, 16 percent for infrastructure investments (land for bus depots and workshops) and the remainder to boost working capital. Valbury Asia Securities was appointed as underwriter for the IPO.
President Director of Valbury Asia Securities Johanes Soetikno said that the IPO of Eka Sari Lorena has been oversubscribed three to four times, thus indicating investors' appetite for the company's stocks. Particularly foreign investors are interested in the company which has a price to earnings ratio of 9x (far below the average industry's regional PER at 21x).
Intercity operations accounted for approximately 80 percent of Eka Sari Lorena’s total operating income (IDR 120.7 billion) at end-September 2013.
Eka Sari Lorena is the second Indonesian bus (transportation) operator that will be listed on the Indonesia Stock Exchange. In 2013, Cipaganti Citra Graha had already conducted its IPO: