The Indonesian Stock Exchange (IDX) has yet to see a wave of technology sector startups preparing for an Initial Public Offering (IPO) as of November 2024, with no tech firms currently in the IPO pipeline. While the tech startup ecosystem has faced challenges, particularly due to rising interest rates, there remains a significant potential for a resurgence in IPO activity for this sector as economic conditions shift. According to the IDX, 29 companies are lined up for IPOs, with most hailing from the consumer and energy sectors. However, the absence of tech startups in this list reflects broader market dynamics, which are influenced by investor sentiment and timing.

The lack of tech sector IPOs can largely be attributed to broader market conditions and the willingness of companies to go public at this point in time. "Whether or not it's the right moment for tech companies to go public depends on the business dynamics and timing," said I Gede Nyoman Yetna, Director of Company Valuation at the IDX. In the wake of higher interest rates, the appetite for technology startups from investors has diminished. The sector, which saw rapid growth in previous years, is now facing a cooling period, with many investors shifting their focus to more stable sectors. However, with rates set to decrease in the coming months, the outlook for tech IPOs is expected to improve.

As interest rates are forecasted to ease, particularly with adjustments from the U.S. Federal Reserve and Bank Indonesia, the conditions for startup growth are expected to become more favorable. "With interest rates returning to more stable levels, we should see a revival of interest in startups," Nyoman explained. This shift will likely reignite investor confidence in tech startups, which could lead to an uptick in IPO activity. The resurgence of these companies on the IPO market will largely depend on their readiness to enter the public market and capitalize on improved economic conditions.

Currently, the majority of the companies lining up for IPOs are from the consumer and energy sectors. According to the IDX, 17 of these companies have large-scale assets worth over Rp250 billion, while 10 companies have medium-scale assets between Rp50 billion and Rp250 billion, and two companies have smaller assets below Rp50 billion. The IPO market continues to attract a wide range of businesses, with a total of 36 companies having raised Rp5.42 trillion from the market by early November 2024. Despite the absence of tech startups for now, the market remains dynamic, and the trend suggests that once market conditions stabilize, tech startups will regain their appeal as IPO candidates.

Overall, while tech startups are not currently leading the IPO charge in Indonesia, the evolving economic landscape indicates a potential revival. The drop in interest rates could serve as a catalyst for the return of tech firms to the IPO scene, aligning with broader investor interests. As market conditions improve, especially with more favorable financial policies, we can expect these startups to re-enter the market and thrive in the coming years.

BISNIS.COM