COMPANY VALUATION ANALYSIS ON PT. DAYAMITRA TELEKOMUNIKASI IN PREPARATION OF INITIAL PUBLIC OFFERING (IPO)
Telecommunications tower leasing industry in Indonesia is experiencing rapid growth in the late 2000's. The growth is driven by the growth in the telecommunications industry as well as government regulations that support the industry. PT Dayamitra Telekomunikasi, also known as Mitratel, a subsi...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/17950 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Telecommunications tower leasing industry in Indonesia is experiencing rapid growth in the late 2000's. The growth is driven by the growth in the telecommunications industry as well as government regulations that support the industry. PT Dayamitra Telekomunikasi, also known as Mitratel, a subsidiary of PT Telekomunikasi Indonesia Tbk, is a one of the leading company in tower leasing industry. Supported by its parent company, PT Dayamitra Telekomunikasi is growing so rapidly now it operates more than 3000 towers, having only entered tower leasing business in 2008. <br />
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In the latest General Meeting of Shareholders, the shareholders asked Mitratel to explore the possibility of an IPO (Initial Public Offering) and make a study and preparation about it. The objective of the shareholders wanting Mitratel to do IPO is to unlock Mitratel value and to finance Mitratel capital expenditure while maintaining the Debt Equity Ratio below 4.0x. Mitratel must assess the value of the company and also asses the IPO plan itself. Undertaking an IPO is a business decision that must be based on consideration of a number of factors. <br />
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The methods used in this final project to determine the value of Mitratel are Discounted Cash Flow (DCF) Valuation and Relative Valuation. DCF method used is two-stage Free Cash Flow to Equity (FCFE) Discount Model. Relative valuation methods used are Price to Earning Ratio (P/E) and Price to Book Value (PBV) multiples. The results from the two methods are combined to come up with the realistic and attractive price of Mitratel equity per shares. This final project will also analyze the IPO decision based on strategic, financial, and valuation factors, whether or not the IPO will satisfy the objective of the shareholders, and give recommendation of what steps need to be taken in order for the IPO to be successful. <br />
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From the analysis, Mitratel is already eligible to list its shares in the main board of Indonesia Stock Exchange, with the recommended price for Mitratel equity is between Rp. 15.000,- to Rp. 20.000,- per share. However from the strategic, financial, and valuation analysis, in order to get better value, Mitratel is recommended to hold the IPO plan. <br />
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Keywords: Two-stage Free Cash Flow to Equity |
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