State-owned construction company Nindya Karya plans to conduct an initial public offering (IPO) on the Indonesia Stock Exchange in 2018 as the firm's corporate earnings have improved after its restructuring and revitalization programs. Nindya Karya business involves (1) general contracting, (2) engineering, procurement, Construction (EPC) and (3) realty.
Boedi Djatmiko, General Manager Investment at state-owned asset management firm Perusahaan Pengelola Aset, said Nindya Karya is one of the companies that succeeded in restructuring under the supervision of Perusahaan Pengelola Aset (PPA). Waskita Karya is another successful example (which went public in Indonesia in 2012).
PPA injected IDR 500 billion (approx. USD $37 million) worth of capital into Nindya Karya in 2012, obtaining 99 percent of the company's shares. Through this capital injection the construction company was able to complete its restructuring process successfully.
Therefore, Djatmiko says Nindya Karya is ready for a IPO in 2018. However, it remains to be seen whether the market conditions are conducive enough to go-ahead with the IPO on the Indonesia Stock Exchange. Still, 2018 seems a better option than 2019 because in 2019 Indonesia will see another round of parliamentary and presidential elections that will surely trigger uncertainties (hence high volatility) in the market.
In 2012 Nindya Karya booked IDR 2 trillion (approx. USD $148 million) in revenue. This figure rose to IDR 4.6 trillion in 2016, with IDR 180 billion worth of net profit.
Nindya Karya already tested market confidence by issuing IDR 300 billion worth of medium term notes (three years/10.35 percent coupon) in 2017. The notes obtained an idBBB+ rating from Pefindo, Indonesia's credit rating agency. Prior to the IPO in 2018, the company still wants to sell IDR 1 billion worth of bonds in 2018.