ANALYSIS OF PT XYZ'S INITIAL PUBLIC OFFERING (IPO) PLAN SCENARIO AND THE IMPLICATIONS FOR PT PQR AS THE MAJORITY SHAREHOLDER

• Main Author: SHADIK (NIM: 29106404), MOKHAMAD
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/12403
• Institution: Institut Teknologi Bandung

One of the strategy that should be considered by PT XYZ to improve their competitive advantage in high competition in telecommunication industry is correlates with the source of fund. One of the alternative is going public through Initial Public Offering (IPO). However, allowing PT XYZ IPO is not an easy decision because it would directly affect shareholder's value, especially for PT PQR . The idea to release 10- 15% shares in PT XYZ toward IPO has been discussed since Megawati Soekarnoputri's era. Although the government, as the majority shareholder already discussed the possibility to conduct the IPO, but the implementation has not come to reality until now because the IPO should give benefits to PT XYZ, PT PQR , and also shareholders. The government will to push the PT XYZ's IPO is not only to raise fund, but also to push good performance companies to enter the stock market. Nowadays, capital market needs blue chip or the excellent stocks to give more passion to market. Moreover, PT XYZ's competitors, big companies such as Indosat were already enter the stock market through IPO.<p>The analysis is based on the fundamental analysis which is one of the methods for valuation of a financial instrument such as stock by mean of its intrinsic value. The fundamental analysis concerns from internal condition of a firm's management to macro economic condition in general. The analysis is aimed to reveal the reason why an Initial Public Offering (IPO) is a chosen alternative for funding, find possible impacts of IPO on stakeholders (both the firm and its shareholders), and finally the analysis is emphasized on the impact of the firm's major stockholders; especially for the value of the firm.<p>Based on the result of the analysis using discounted cash flow, PT XYZ's 100% equity is valued at IDR 173,140.65 billion or USD 17,821.99 million. The equity value of PT PQR is IDR 164,644.09 billion or USD 16,947.41 million. Therefore, 65% of PT PQR sel's equity contributes as much as 68.35% to the consolidated value of PT PQR.<p>The possibility of the PT XYZ's IPO is concluded to be delayed until the right moment is found in the future because, if IPO is done, the value of PT PQR will decrease as the result of the switching equity by the existing investor of PT PQR and holding company discount. IPO is only to be executed if PT PQR has possessed other business unit with the same contribution as PT XYZ gives, or if there is a political push from the government as the major stockholder of PT PQR .