The steps to prepare for an Initial Public Offering (IPO) in Indonesia involve the process in which a private company first offers its shares to the public for purchase. This process involves several stages that the company must go through before its shares can be traded on the stock exchange. Here is an explanation of the steps:
INITIAL PREPARATION:
Before conducting an IPO, the company must establish clear goals and reasons for wanting to become a public company. They also need to select legal, financial, and capital market advisors to assist them in this process. Additionally, the company needs to assemble an internal team responsible for preparing for the IPO.
THE IMPORTANCE OF HAVING AN EFFECTIVE INTERNAL TEAM IN THE IPO PREPARATION PROCESS
- Good Coordination: An internal team consisting of members from various departments such as finance, legal, and management can ensure good coordination between the various aspects of IPO preparation. This helps in the preparation of documents, disclosure of information, and the necessary financial preparations.
- In-Depth Knowledge: The internal team has in-depth knowledge of the company’s operations and the needs of the capital market. They can provide valuable insights in drafting prospectuses, conducting company valuations, and preparing accurate financial reports.
- Risk Management: The internal team can help identify and manage risks associated with IPO preparation. They can conduct a comprehensive evaluation of the company’s internal processes and ensure that all requirements and regulations are met.
- Effective Internal Communication: With a strong internal team, internal communication can run smoothly. This ensures that all departments are involved in the IPO preparation process and understand their roles in achieving IPO goals.
- Regulatory Compliance: The internal team can ensure that the company complies with all applicable regulations in IPO preparation. They can work with external advisors to ensure that all documents and procedures comply with capital market requirements.
FINANCIAL PREPAREDNESS:
An important step is to conduct a financial audit by an independent auditor. The company also needs to prepare financial statements in accordance with applicable accounting standards. This is important to ensure that the company’s financial information is transparent and reliable to potential investors.
DOCUMENT PREPARATION:
The company must prepare a prospectus containing comprehensive information about the company and the IPO plan. The legal documents required for IPO registration also need to be carefully prepared.
COMPANY VALUATION:
Before the IPO, the company must conduct a valuation of the company’s worth by an independent appraiser. This valuation report will form the basis for setting the share price when the IPO is conducted.
INTERNAL PREPARATION:
The company needs to ensure that its internal systems meet the standards required for a public company. This may involve changes in the organization and management of the company.
MARKET PREPARATION:
Before the IPO, the company needs to conduct a roadshow to introduce the company to potential investors. They also need to ensure that the company is ready to meet the demands of the capital market after the IPO.
REGISTRATION AND OFFERING:
After all preparations are completed, the company submits the IPO registration to the Financial Services Authority (OJK). They also determine the share offering price and the number of shares to be offered to the public.
IPO EXECUTION:
At this stage, the company offers shares to the public. They must ensure that the offering process runs according to plan.
After the IPO is completed, the company will become a public company and its shares can be traded on the stock exchange. The company must comply with all regulations applicable to public companies in the Indonesian capital market.
