Telkom Boss Opens up Mitratel IPO, Overtakes Bukalapak?
The management of BUMN PT Telkom Indonesia (Persero) Tbk (TLKM) was present at the DPR to explain the corporate action of the initial public offering (IPO) of PT Dayamitra Telekomunikasi alias Mitratel in a hearing meeting (RDP) with Commission VI DPR RI on Wednesday (10/11/2021).
In his explanation, Telkom's management said that the corporate action to release shares in the tower subsidiary will have a positive impact on the company.
The IPO plan will also provide strong capital for Telkom's subsidiary in the tower business to develop its business. Telkom Indonesia President Director Ririek Adriansyah said the company has started the IPO process since last year, with preparations from the business side to licensing to shareholders. Meanwhile, the permit from the ministry was only obtained in August this year. The partner's IPO status and background in unlocking Mitratel are expected to have a positive impact on Telkom's valuation and, of course, on Telkom's share price. And of course, for investors themselves, this will strengthen capital to develop further businesses both organic and inorganic, "said Ririek in a hearing (RDP) with Commission VI DPR RI on Wednesday (10/11/2021).
He explained that the company is currently waiting for an effective statement from the Financial Services Authority (OJK) to be obtained on November 12, 2021, so the company targets conducting a public offering on November 16–18.
Then on November 19, there will be a final allocation. Finally, this process will be officially closed by entering the listing [listed] on the stock exchange using the MTEL stock code. We hope this can be done on November 22nd this year, "he said.
Thus, he said, Mitratel will officially become a public company whose shares are listed on the IDX.
IPO price
The former Telkomsel boss revealed that MTEL shares were offered at a price of Rp 775–Rp 975/share with a maximum offered amount of 25,540,000,000 shares, or equivalent to 29.85%.
However, Ririek was reluctant to reveal the price of the IPO to the underwriters. "The exact figure is still in the process [of the IPO price]. There is literacy that is carried out according to existing regulations, but 29.8% is the maximum number, "he added.
"The expected total is Rp 15 trillion to Rp 24 trillion, and this will all go to Mitratel."
Based on sources, Mitratel's share offering price has been set at Rp 800/share. This determination was made after an initial offer (book building) was made on October 26th, 2021.
Thus, by releasing 25,540,000,000 shares, or a maximum of 29.85% of the company's issued and paid-up capital after the public offering, the company will get funds worth Rp 20.43 trillion.
If Mitratel succeeds in obtaining IPO funds of a maximum of IDR 25 trillion at a price of over IDR 975, or at least achieves a fund called Ririek of IDR 24 trillion, then it will beat the IPO fund of PT Bukalapak.com Tbk (BUKA), which was listed on August 6 with funds of Rp 22 trillion, at that time the largest in the history of the capital market.
The company cooperates with PT BRI Danareksa Sekuritas and PT Mandiri Sekuritas as underwriters for the issuance of securities from this IPO. In addition, there are HSBC, JP Morgan, and Morgan Stanley as joint global coordinators.
Ririek explained that the funds obtained by the company from the IPO will be used for the company's organic capital expenditure (capex) for the construction of new and inorganic telecommunication towers by acquiring others, including those of PT Telkomsel. Others are to meet the company's working capital needs.
"Considering that this process has been running, what we generally convey is that the results so far are very positive," he said.
Ririek explained that the target, after obtaining IPO funds from Mitratel, will expand its business. Several business developments that can be made start from entering the fiber optic business, supporting 5G development.
Apart from the plan to add telecommunication towers, both organically and inorganically, the fiber optic business is also considered to have the potential to provide new growth for this subsidiary.
"We will also enter into new businesses that are relevant to towers, such as fiber optics or the acquisition of companies that have fiber optic services," said Ririek.
In addition, in the context of developing 5G in Indonesia, there is not only a need for new telecommunication towers in areas that do not have telecommunication access, but also the construction of a new pool to support this network in areas where towers are no longer built.
Another example is the development of computing apps to support 5G networks that have distributable characteristics, requiring them to be as close to the user as possible.
"Juga akan mendukung perkembangan IT karena 5g karakternya distributif, jadi kemampuan komputingnya itu harus sedekat mungkin dengan pengguna akhir, pelanggan seluler. Sehingga Mitratel akan mempersiapkan apps computing di berbagai lokasi tower yang dimilikinya, "terangnya."