Fore Coffee’s IPO Oversubscription Reaches 200.63 Times

Fore Coffee, a prominent local Indonesian coffee startup, has recorded an exceptional oversubscription of 200.63 times during its Initial Public Offering (IPO).

This tremendous demand came from 114,873 investors, indicating strong market interest and investor confidence in the company. The oversubscription, which occurs when demand for shares exceeds the number offered, underscores the robust optimism surrounding local businesses in Indonesia.

"The decision to proceed with the IPO, despite the stock market being at a low point since the pandemic, has proven successful," said Willson Cuaca, Co-Founder & Managing Partner of East Ventures, reflecting on the outcome.

IPO Price Set at IDR 188 per Share

Fore Coffee has set the price of its shares at IDR 188 per share for the IPO, with the company aiming to raise a total of IDR 353.44 billion. The IPO will offer 1.88 billion shares to the public, representing 21.08% of the company’s paid-up and fully subscribed capital.

The funds raised from the IPO will be used for expansion, operational growth, and supporting the business needs of its subsidiary, PT Cipta Favorit Indonesia (CFI).

Fore Coffee's IPO has drawn significant attention, with Mandiri Sekuritas and Henan Putihrai Sekuritas acting as the underwriters for the offering.

IPO Funds Allocation for Expansion and Operations

Fore Coffee plans to allocate the majority of the funds raised from the IPO toward expansion. About 76% of the proceeds, approximately IDR 275 billion, will be used for the opening of 140 new outlets across Indonesia.

The company aims to expand into regions including Jabodetabek, Java, Sumatra, Kalimantan, Sulawesi, and Bali. The expansion will take place over two years, from 2025 to 2026, with a focus on renovating and equipping new outlets. Another 18% of the funds will be used to provide capital to CFI, which plans to open an additional 30 outlets by 2027.

The remaining funds will be allocated to support working capital, including the purchase of raw materials such as coffee beans, milk, and syrups, as well as covering operational costs such as rent and utilities.

Fore Coffee's Strong Financial Performance and Growth

Fore Coffee has demonstrated impressive growth in the highly competitive coffee industry. In 2024, the company reported a significant Same Store Sales Growth (SSSG) of 42%, far exceeding the global average of 5%.

This growth can be attributed to the company's strong brand presence, effective marketing strategies, and innovative product offerings. In terms of profitability, Fore Coffee reported a net profit of IDR 42.3 billion for the nine-month period ending in September 2024, marking a strong recovery from a loss of IDR 16.4 billion during the same period in 2023.

For the full year 2023, the company posted a net profit of IDR 1.1 billion, reversing a net loss of IDR 59.9 billion in 2022.

Commitment to Dividends and Financial Strategy Post-IPO

Following its listing on the Indonesia Stock Exchange (IDX), Fore Coffee has committed to distributing at least 40% of its net profit after tax as dividends to its shareholders.

This move reflects the company's dedication to providing value to its investors while continuing to reinvest in its expansion. Fore Coffee’s financial strategy is designed to balance growth with shareholder returns, ensuring that the company maintains strong financial health even as it grows its operations and market presence.

PHOTO: FORE COFFEE

This article was created with AI assistance.