Estimating Company Value Considering Its Future Risk Before IPO of PT Karya Internusa: A Construction Company

• Main Author: Lu'ay Putri, Fawwaz
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/45290
• Institution: Institut Teknologi Bandung

In the last decades, the development in economy of Indonesia has been growing to the better stage. This development stimulates other sector to grow together in order to support the economic development, like infrastructure sector. This situation attempt the company which operates in infrastructure to compete to be the best in its business. PT Karya Internusa is a construction company This company was established in 1997 and had been expand the business to batching plant sector in 2013. PT Karya Internusa specialized in construction and architecture, excavation foundation and fabrication and installation of steel construction. PT Karya Internusa has done many projects from big companies like Pertamina, PLN, Wilmar Indonesia, Petrokimia Gresik, etc. Until now, PT Karya Internusa is in development stage. It shows from the revenue of the company that has been growing in last few years. PT Karya Internusa is awalys trying to improve performance in its business in order to develop be better since the company has plan to do Initial Public Offering (IPO) in the next five years. From the explanation above, a question arise. How much is the range of value of PT Karya Internusa? And from that question, another question would be arise about what are the actions required for PT Karya Internusa to increase the value of the company?. To answer the question, Discounted Free Cash Flow Approach is used to calculate the company value. But before that, Qualitative Method to identify the company’s future risk before doing IPO. From the research that already done, The value amounts are determinded from the calculation of Discounted Free Cash Flow approach with considering the future risk by Qualitative as a chosen method to identify the risk. To identify and measure the risk before additing it to the valuation calculation, doing observation to the workfield and interview with BOD of the company are the methods that already done by the researcher. The percentages that used in the making of pro forma financial statement which is one of steps in Discounted Free Cash Flow approach, are based on the interview with BOD regarding the company’s risks and plans. In conclusion, the company values based on pessimistic scenario is IDR 220,138,861,481, most likely scenario is IDR 238,872,795,129, and optimistic scenario is IDR 290,171,426,063. It answers the questions that the range of PT Karya Internusa’s value is IDR 220,138,861,481 to IDR 290,171,426,063. However, the company should iii do the risk mitigations, increase and maintain the future growth and reduce the cost of financing. It will help PT Karya Internusa to increase its value.