Is Indonesia’s IPO future as bright as it looks, as Harita Nickel makes glittering public debut?

Jakarta’s stock exchange is proving a bright spot amid stuttering global IPO market, with Harita’s debut underlining appetite for electric vehicle battery sector

Bourse saw record US$1.45 billion in IPO proceeds between January and March, far more than Hong Kong, but analyst urges caution, saying most Indonesian listings this year were small, and not all pan out well

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Indonesian workers monitor the nickel melting process. Photo: Reuters

Published: 12:00pm, 14 Apr 2023

The successful initial public offering of Indonesian nickel producer Trimegah Bangun Persada, also known as Harita Nickel, underlines just how promising the IPO scene in Southeast Asia’s biggest economy is, amid a dearth of listings elsewhere in Asia.

Harita’s share price opened trading at 1,360 rupiah on Friday, a gain of 8.37 per cent from the opening price of 1,250 rupiah.

Ahead of the listing, Harita Nickel collected 9.997 trillion rupiah (US$673 million) in IPO proceeds, making it the largest IPO on the Indonesia Stock Exchange (IDX) so far this year, bigger than the 9.06 trillion rupiah raised by Pertamina Geothermal Energy, the subsidiary of state-owned oil and gas company Pertamina, when it went public in February.

Harita’s debut has also underscored investors’ appetite in Indonesia’s electric vehicle (EV) battery sector, the cornerstone of President Joko Widodo’s economic policies whereby he aims to develop a robust domestic EV supply chain rather than just exporting raw materials.

With its joint venture partner, Chinese mining company Ningbo Lygend Mining, Harita runs Indonesia’s first high-pressure acid leaching (HPAL) plant on Obi Island in North Maluku province. The smelter is capable of processing low-grade nickel into mixed hydroxide precipitate (MHP), which can be used in EV battery production.

The company is planning to use the money raised from the IPO to pay off loans and expand its MHP production capacity from 60,000 tonnes to 120,000 tonnes of processed nickel by 2024.