The capital market provides a solution for companies to obtain funding through offering a portion of the company's shares to the public or IPO. This process also transforms the company from a closed entity to an open one where it is required to be managed in more effective, professional, and transparent manners. Essentially, all companies have the opportunity to become publicly listed and have their shares traded on the IDX. However, there are several points to note in the listing requirements for mining companies to conduct an IPO. With the issuance of Decree of the Board of Directors of the Indonesia Stock Exchange Number I-A.1 Kep-00100/BEI/10-2014 on the Listing of Shares and Equity Securities Other than Shares Issued by Companies in the Mineral and Coal Mining Sector ("I-A.1 Reg."), eases in conducting IPO are provided for mining companies. In addition to the requirements under I-A.1 Reg, mining companies are also required to meet the requirements under Decree of the Board of Director of the Indonesia Stock Exchange Number I-A Kep-00101/BEI/12-2021 on Amendment to Regulation No. I-A concerning the Listing of Shares and Equity Securities Other Than Shares Issued by Listed Companies. Find out more our insights about this topic in our Legal Brief publication.
2. BACKGROUND
Public Offering is a Securities offering activity carried out by the
Issuer to sell Securities to the community based on the procedures
regulated under this Law and its implementing regulations.
Definition
Art. 1 (15) Law 8/1995
Relevant Parties
Legal Consultant
a legal expert who provides legal opinions to other parties
and is registered with the Financial Services Authority.
Issuer
The Party who carry out a Public Offering.
Legal Basis
Underwriter
the safekeeping services for Securities jointly owned by more
than one Party whose interests are represented by the
Custodian
Securities Administration Bureau
a Party that, based on a contract with an Issuer, carries out
the recordation of Securities ownership and distribution of
rights related to Securities.
Notary
a public official authorized to create authentic deeds and
is registered with the Financial Services Authority.
Appraiser
a party that provides appraisals of property and/or business
valuations and is registered with the Financial Services
Authority.
Public Accountant
a public accountant who has obtained a license from the
competent authority and is registered with the Financial
Services Authority.
Several Mining Companies that have conducted IPO based on IDX Report May 2024
Law Number 8 of 1995 on Capital Market as partially amended
and revoked by Law Number 4 of 2023 (“Law 8/1995”).
Decree of the Board of Director of the IDX Number I-V Kep-
00104/BEI/07-2023 Amendment to Regulation No. I-V
regarding Special Provisions for the Listing of Shares and
Equity Securities Other Than Shares Issued by Listed
Companies on the Acceleration Board. (“I-V Reg.”)
Decree of the Board of Director of the IDX Number I-A Kep-
00101/BEI/12-2021 on Amendment to Regulation No. I-A
concerning the Listing of Shares and Equity Securities Other
Than Shares Issued by Listed Companies (“I-A Reg.”)
a
b
Decree of the Board of Directors of the IDX Number I-A.1 Kep-
00100/BEI/10-2014 on the Listing of Shares and Equity
Securities Other than Shares Issued by Companies in the
Mineral and Coal Mining Sector (“I-A.1 Reg.”)
d
e
Securities are marketable securities, namely debt
acknowledgment instruments, commercial papers, shares, bonds,
debentures, collective investment contract participation unit,
Securities futures contracts, and every derivative of Securities
Elucidation of Art. 64 OJK Reg. 41/2020
Competent Person
an independent party registered with a professional
organisation in mining and/or geology, who exercises their
expertise based on standards set by the competent authority
or published by local or foreign professional organisations.
Section I.2 I-A.1 Reg
Registration Statement is the set of documents that must be
submitted to the Capital Market Supervisory Agency by an Issuer
for the purpose of Public Offering or a Public Company.
c Decree of the Board of Director of the IDX Number I-Y Kep-
00083/BEI/11-2022 on the Listing of Shares and Equity
Securities Other Than Shares Issued by Listed Companies on
the New Economy Board. (“I-Y Reg.”)
Art. 1 (5) Law 8/1995
Art. 1 (19) Law 8/1995
A H R P L e g a l B r i e f
3. The companies intending to conduct an IPO on the IDX will be listed and categorized according to four listing boards based on the qualifications
held by each company, namely: (i) Main Board; (ii) New Economy Board; (iii) Development Board; and (iv) Acceleration Board. Further
explanation is provided below:
Aspects Main Board New Economy Board Development Board Acceleration Board
Definition
The Main Board is a
listing board provided for
the registration of shares
from large companies
with significant
operational experience.
The New Economy Board is a
listing board provided for the
registration of shares from
companies that utilize
technology to create innovative
products and/or services that
enhance productivity and
economic growth and have
social benefits and high growth
potential.
The Development Board is
a listing board provided for
the registration of shares
from companies expected to
grow.
The Acceleration Board is a
listing board provided for the
registration of shares from
Issuers with Small-Scale
Assets or Issuers with
Medium-Scale Assets.
Current
Condition
*As of
December 2023
There are 353
companies listed on the
Main Board, including (i)
Bank Syariah Indonesia
Tbk. (BRIS); (ii) Aneka
Tambang Tbk. (ANTM);
and (iii) XL Axiata Tbk.
(EXCL).
There are 3 companies listed
on the New Economy,
including (i) Bukalapak.com
Tbk. (BUKA); (ii) GoTo Gojek
Tokopedia Tbk. (GOTO); and
(iii) Global Digital Niaga Tbk.
(BELI).
There are 317 companies
listed on the Development
Board, including (i) Midi
Utama Indonesia Tbk.
(MIDI); (ii) Bintang Oto
Global Tbk. (BOGA); and
(iii) AirAsia Indonesia Tbk.
(CMPP).
There are 40 companies
listed on the Acceleration
Board, including (i) Planet
Properindo Jaya Tbk.
(PLAN); (ii) Nanotech
Indonesia Global Tbk.
(NANO); and (iii) Hassana
Boga Sejahtera Tbk.
(NAYZ).
General Overview of Listing Board
Aspects Main Board New Economy Board Development Board Acceleration Board
Shares offering
before listing
application
Minimum 300,000 Minimum 300,000 Minimum 150,000 -
Shares offered
to the Public
At least 20% of paid-up
capital
Number of
Shareholders
(after IPO)
At least 1000
shareholders
At least 1000 shareholders At least 500 shareholders At least 300 shareholders
IPO Price ≥ Rp100 ≥ Rp100 ≥ Rp100 ≥ Rp50
Requirement of Listing Board
(Offering Structure Aspects)
Equity
Value (pre-
IPO)
Total
Shares to
be Listed
< Rp500
billion
20%
Rp500
billion –
Rp2 trillion
15%
Rp2 trillion 10%
Equity Value
(pre-IPO)
Total Shares
to be Listed
< Rp500
billion
20%
>Rp500
billion –
Rp 2 trillion
15%
Rp2 trillion 10%
Equity Value
(pre-IPO)
Total Shares
to be Listed
< Rp500
billion
20%
Rp500 billion
–
Rp 2 trillion
15%
Rp2 trillion 10%
I-A.1. Reg. jo. I-A Reg. jo. I-Y Reg. jo. I-V Reg.
A H R P L e g a l B r i e f
General Overview and Requirements for IPO (1/2)
4. Requirement of Listing Board
(Financial and Accounting Aspects)
Aspects Main Board New Economy Board Development Board Acceleration Board
Form of Legal
Entity
Company Company Company Company
Business Scale Large company Large company Medium size company Company with small and
medium-sized assets
Core Business/
Business
Income
≥ 36 consecutive months ≥ 36 consecutive months 12 consecutive months
Proven by business revenue
for the last 1 (one) year
Has operated commercially
and recorded business
revenue in the last financial
year
Audited
Financial Report
Minimum 3 years Minimum 3 years Minimum 12 months Minimum 1 year
Profit - - Permissible loss (Operating
Profit in the 2nd year since
listing based on projection
and in the 6th year for
specific business sectors)
Permissible loss (Operating
profit at the end of the 10th
financial year based on
projection)
Capitalization a. Net-Tangible Assets ≥
Rp250 billion;
b. Accumulated profit
before tax (EBT) for
the last 2 (two) years ≥
Rp100 billion and
market capitalization ≥
1 trillion;
c. Revenue ≥ Rp800
billion and market
capitalization ≥ Rp8
trillion;
d. Total assets ≥ Rp2
trillion and market
capitalization ≥ Rp4
trillion; or
e. Cash flow from
operating activities for
2 (two) years ≥ Rp 200
billion and market
capitalization ≥ Rp4
trillion.
a. Net-Tangible Assets ≥
Rp250 billion;
b. Accumulated profit
before tax (EBT) for the
last 2 (two) years ≥
Rp100 billion and market
capitalization ≥ 1 trillion;
c. Revenue ≥ Rp 800 billion
and market capitalization
≥ Rp 8 trillion;
d. Total assets ≥ Rp2 trillion
and market capitalization
≥ Rp 4 trillion; or
e. Cash flow from operating
activities for 2 (two) years
≥ Rp200 billion and
market capitalization ≥
Rp 4 trillion.
a. Non-Tangible Assets ≥
Rp50 billion;
b. Accumulated profit
before tax (EBT) for the
last 2 (two) years ≥
Rp10 billion and market
capitalization ≥ Rp 100
billion;
c. Revenue ≥ Rp40 billion
and market
capitalization ≥ Rp400
billion;
d. Total assets ≥ Rp250
billion and market
capitalization ≥ Rp500
billion; or
e. Cash flow from
operating activities for 2
(two) years ≥ Rp20
billion and market
capitalization ≥ Rp400
billion.
Subject to OJK Reg.
53/2017
I-A.1. Reg. jo. I-A Reg. jo. I-Y Reg. jo. I-V Reg.
A H R P L e g a l B r i e f
General Overview and Requirements for IPO (2/2)
5. A H R P L e g a l B r i e f
General Provisions
Line of
Business
a. companies engaged in the mineral and coal mining business sector; or
b. holding company that has controlled companies engaged in mineral and coal mining business sector, and:
1) having main mining revenue contributions if the holding company already has consolidated income; or
2) will gain main mining revenue contributions based on financial projections no later than the 4th (fourth) year if the
holding company has not owned the consolidated income yet.
Permits the prospective listed companies have obtained IUP for Operation and Production/Izin Usaha Pertambangan Operasi
Produksi (“IUP-OP”) or Special IUP for Operation and Production/Izin Usaha Pertambangan Khusus Operasi Produksi
(“IUPK-OP”).
Operational
Status
a. it is on the selling stage;
b. it has implemented the operation and production stage, but it has not reached the selling stage yet; or
c. it has not started the operation and production yet.
Initial Listing Requirements
Net Tangible
Assets
based on the latest audited financial statements, the sum of net tangible assets and deferred exploration costs meet the
following requirements:
a. at least Rp100.000.000.000,- (one hundred billion rupiah) for the main board/papan utama; and
b. at least Rp5.000.000.000,- (five billion rupiah) for the development board/papan pengembangan.
Human
Capital
having at least 1 (one) director who meets the following criteria:
a. having educational background in engineering; and
b. having work experience in managerial position for operational matters in the company engaged in mineral and coal mining,
at least 5 (five) years in the last 7 (seven) years.
Backup
Condition
having proven reserves and probable reserves based on a report issued by Competent Person.
Permit or
Other
Important
Letter
a. possessing IUP-OP, permit to use/utilize lands, and other relevant permits related to mining activities issued by the
competent authority;
b. a clear and clean certificate or equivalent documents for mining permits issued by the Directorate General of Minerals and
Coal or other authorized government institutions;
c. especially for: (i) prospective listed companies that have implemented the operation and production stage, but have not
reached the sales stage; and (ii) prospective listed companies that have not yet commenced the operation and production
stage, they shall satisfy the following matters:
1) having a feasibility study with the following conditions: (i) it is prepared no later than 3 (three) years before the listing
application is submitted to the IDX; and (ii) it is signed by the Competent Person;
2) having a statement from the Competent Person stating that the information and data in the feasibility study are still
valid and relevant, and prepared no later than 1 (one) year before the listing application is submitted to the exchange;
3) having permit to conduct the operation and production stage from the competent authority for the mining area as
referred to in the feasibility study.
Prospective Listed Companies in the mineral and coal mining sector that only have special licenses to handle transport and sales activities as well as
processing and refining are not included as Prospective Listed Companies regulated in I-A.1. Reg.
Notes
Section II I-A.1 Reg.
Section III I-A.1 Reg
IPO Requirements for Mining Companies
6. Initial Preparation for IPO
The IPO process involves several aspects, thus the formation of a
strong IPO team is quite crucial. The internal team should ideally
consist of individuals proficient in financial and legal aspects. This
team will collaborate with professionals appointed by the company
to assist in the IPO process, particularly in preparing prospectus
documents.
a. Company needs to determine the approximate amount of funds
required from the IPO, aligning it with the company's business
plan.
b. Founding shareholders should decide on the maximum
percentage of public ownership desired.
c. for a conglomerate with multiple subsidiaries and diverse
business lines, several considerations need to be addressed:
i. Which subsidiaries will offer their shares to the public?
ii. Is there a need for spin-offs, mergers, acquisitions, or asset
divestitures before the public offering?
Generally, a higher company valuation offered to the public
tends to attract more investor interest.
d. Company needs to ensure compliance with all regulatory
requirements in agreements or other matters before the IPO.
e. Company needs to assess and address any significant issues,
such as legal challenges, to ensure smooth operations and
facilitate the IPO process.
f. Company needs to evaluate whether changes are needed to its
board of directors and/or commissioners to enhance corporate
governance and support the IPO process.
To assist the company in the IPO process, company needs to select
several parties as follows:
a. Securities Underwriter who will assist in offering the
company's shares to investors;
b. Public Accountant who will audit the company's financial
statements;
c. Legal Consultant who will conduct legal due diligence and
provide legal opinions;
d. Notary who will assist in amending the Articles of Association,
drafting deeds and agreements;
e. Appraiser, if the company owns fixed assets such as land or
buildings that need to be valued by an independent appraiser;
f. Securities Administration Bureau that will assist in
administering the ownership of the company's shares.
In this preparation stage, company convenes a GMS to obtain
approval for conducting IPO from all shareholders and to determine
the number of shares to be offered to the public. Company also
needs to amend its Articles of Association from a closed company
to a public company. Additionally, the company needs to establish a
Corporate Secretary, Internal Audit, and Audit Committee, if not
already in place.
A company who wishes to IPO and lists its shares on the IDX, shall prepare several documents that initiated by submitting a registration statement
to OJK and an application for share listing to IDX, by preparing, among others, the following documents:
a. Company profile, information about the IPO plan, underwriter, and supporting professions;
b. Legal opinions and examination reports from Legal Consultants;
c. Audited Financial Statements by Public Accountants;
d. Appraiser's Reports (if any);
e. Articles of Association of the public company approved by the Minister of Law and Human Rights;
f. Prospectus, which includes, among others, information contained in documents a. to e. above;
g. Financial projections.
Formation of Internal IPO Team
Initial Consideration for IPO
IPO Guidelines by IDX, P. 5
General Meeting of Shareholders and Amendment of
Articles of Association
Preparing IPO-related Documents
Appointment of External Professionals
1
2
4
3
5
A H R P L e g a l B r i e f
7. Process of IPO to Public and Listing of Shares on IDX
1
The company's
internal team is
assisted by
underwriters and
supporting
professions
Initial Preparation
and Documents
Submission
of application
for the preliminary
listing agreement
of shares to IDX &
registration
of shares to KSEI
Preliminary listing
agreement given by IDX
a. Company presentation
to IDX
b. IDX visits to the
company
c. Request for
explanation and
document completion
by IDX
1 - 4 weeks
Submission of registration
statement to OJK
Permission for publication
of summary prospectus
granted by OJK
During the process at OJK,
OJK will request
changes/additional
information from the
company
4 - 6 weeks
a. Announcement of
summary prospectus in
newspaper
b. Initial offering
(bookbuilding) & public
exposure
Submission of price
information & other
disclosures to OJK
Effective statement
granted by OJK
During the process
at OJK, OJK will
request
changes/additional
information from the
company
a. Announcement of
amendment/addition
to summary
prospectus in
newspaper
b. Provision of
prospectus
Submission of
application for listing of
shares to IDX
Public offering of shares
Approval for listing of
shares granted by IDX
Listing and trading of
company shares of IDX
a. Allotment
b. Refund & Distribution of
Shares
c. Submission of Offering
Results Report to OJK
d. Submission of Auditor's
Report to OJK
e. Submission of shareholder
count information to BEI
OJK
Company
IDX
Remarks:
IPO Guidelines by IDX, P. 6
A H R P L e g a l B r i e f
2 3 4 5
9 8 7 6
10 11 12 13
8. Advantages and Consequences of IPO
A H R P L e g a l B r i e f
Advantages of IPO
After becoming a public company, a
company can utilize the capital market to
obtain further funding, including through
(i) a limited public offering restricted to
investors who already own shares in the
company; (ii) through secondary offerings
and (iii) private placements.
Obtaining Funding for Company
Becoming a public company, public can
obtain real-time data on the company's
value movement. Any improvement in
operational performance and financial
performance generally will have an impact
on the stock price on the IDX, ultimately
enhancing the overall company value.
Enhancement of Company Value
By becoming a public company with shares
traded on the Exchange, financial
institutions will have a better understanding
of and trust in the company because banks
can assess the company's financial
condition through various disclosures made
by the company through the Exchange.
Ease of Access and Increased
Trustworthiness for Loan
By listing the company's shares on the
Indonesia Stock Exchange, information
and news about the company will
frequently be observed by the media,
data providers, and analysts at securities
firms. Such publications will effectively
and efficiently enhance the company's
image and exposure to its products.
Enhancing the Company's Image to
Public Company
As a public company, the demand for
improvement in performance, service,
reporting, and good governance becomes
imperative. This drives the company and its
employees to be professional and deliver
the best results, enhancing competitiveness.
Enhancement of Company Value
1 2 3
4 5
Consequences of IPO
With the entry of public investors, founding
shareholders no longer hold 100% ownership of the
company and must share voting rights in the
shareholders' general meetings. However, founding
shareholders can still maintain their status as
controlling shareholders, as long as their share
ownership exceeds 50% of the total fully paid-up
shares, or they have the ability to determine the
management or policies of the Public Company.
Ownership Sharing
OJK and the IDX have regulations in place for
companies whose shares are listed on the
Exchange. These regulations include transparency
or disclosure requirements to ensure that all
shareholders can obtain the necessary information
to make investment decisions. Other provisions that
must be met include the establishment of corporate
organs, each with functions to execute good
corporate governance.
Obligation to Comply with Applicable Capital
Market Regulations
1 2
IPO Guidelines by IDX, P. 3-4
IPO Guidelines by IDX, P. 4
9. Obligations of Mining Companies After
IPO
A H R P L e g a l B r i e f
Int the event the IDX approves the listing of the Company's Prospective Securities, the mining company must adhere to the requirements
outlined for Listed Companies in the mineral and coal mining sector.
Provision on Director
The mining company must have at least 1 (one) Director with
the following provisions:
a. has a background in technical education; and
b. has work experience in managerial positions in the
operational department of companies engaged in the field
of mineral and coal mining, for at least 5 (five) years
within the last 7 (seven) years.
Specifically for Listed Companies that have completed the
production operation stage but have not reached the sales
stage, and Listed Companies that have not yet started the
production operation stage, it is mandatory to disclose
information regarding monthly report on the realization of the
Production Operation work plan. The report must be submitted
to the Exchange no later than the 12th day of the following
month until the Listed Company has completed the sales stage
by completing the form in accordance with Appendix I-A.1 Reg.
Section .2.
Disclosure of Information regarding
Progress of Achievement Projections
Specifically for Listed Companies that have completed the
production operation stage but have not reached the sales
stage, and Listed Companies that have not yet started the
production operation stage, it is mandatory to disclose
information regarding Information related to the progress of
achievement projections must be disclosed for monitoring
purposes by the IDX, submitted concurrently with the
submission of annual financial reports, where the submission is
made periodically every 1 (one) year until the 5th (fifth) year
since being listed on the Exchange or until the Company has
recorded operating profit and net profit whichever is earlier, by
completing the form in accordance with Appendix I-A.1.Reg.
section 3.
The mining company is obliged to comply with the provisions
in order to maintain listing on the Exchange, as stipulated in I-
A Reg. and I-A.1 Reg. section III.1.5.
Section V.V.2. I-A.1. Reg.
. Section V.V.2.1 I-A.1. Reg.
Section V.V.. I-A.1. Reg.
Section VIII.4. I-A. Reg.
Disclosure of Information regarding Monthly
Reports
Compliance with I-A Reg. and I-A.1 Reg.
1
2
3
4
10. We will continue to follow the developments on this topic and provide additional information as it
becomes available. If you have any questions on this topic, please contact:
Aryangga Pradana Febrianto
ary@ahrplaw.com
Ahmad Arif
arif@ahrplaw.com
Hany Areta Athayalia
hany@ahrplaw.com
This publication has been prepared by AHRP for educational and informational purposes only. The information contained in this publication is not
intended and should not be construed as legal advice. Due to the rapidly changing nature of law, AHRP makes no warranty or guarantee
concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it
applies to your circumstances before deciding to take any action.
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