On Tuesday, the Indonesia Stock Exchange (IDX) welcomed Blibli—the third tech giant to list on the local bourse. The 11-year-old e-commerce platform affiliated with the conglomerate Djarum Group has followed the footsteps of e-commerce company Bukalapak and tech giant GoTo in choosing the IDX as its listing destination. And based on the proceeds alone, it looks like these three companies made the right call. Bukalapak raised US$1.5 billion—the biggest fundraise in the IDX’s history—despite Indonesia's economy still reeling under the impact of the pandemic. On the other hand, GoTo raised US$960 million in the biggest IPO of 2022, despite the Ukraine conflict-led uncertainties in the market. In this year’s second-largest fundraise, Blibli has raised US$510 million, despite tech stocks underperforming on the local stock exchange. According to IDX data, technology stocks (as gauged by the IDX Sector Technology index) have lost around 27% of their value this year. Meanwhile, the Jakarta Composite Index—the IDX’s benchmark index—booked an 8% gain. There are a lot of contradictions. But the conclusion is this: there’s a lot of enthusiasm for new tech stocks in Indonesia. Whether the support is long-lasting, however, is a different story. Market sensibilities come around much later, and when the hype has cooled off, the company’s business model and financial performance play a larger role in the investors’ willingness to place their money in the company. The Blibli listing and discusses the company’s strengths and weaknesses to help you decide whether the optimism will sustain or fade away. It’s important to consider where a company plans to allocate its proceeds—it can tell us how big and fast it will grow in the future. While Bukalapak and GoTo utilised their entire IPO proceeds to fund working-capital requirements, Blibli plans to use only 28% as working capital. It will use the rest of the IPO proceeds to pay off its debt.
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