COMPANY VALUATION FOR INITIAL PUBLIC OFFERING - A CASE STUDY OF PT XYZ

• Main Author: Hermawan, Hendra
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/64368
• Institution: Institut Teknologi Bandung

In PT XYZ's Long-Term Plan, the IPO has been mandated to be carried out in 2023. In addition, the company also requires funding to improve its capital structure and funding for value capturing of the Trans Sumatra Toll Road project and projects other than the Sumatran toll road. In order for these objectives to be carried out properly, it is necessary to know the picture of the company at the time of the IPO. To find out, this study evaluates to provide an overview of the company's intrinsic value to be offered at the time of the IPO, provides an estimate of the value of PT XYZ's fair share price using the DCF and Relative Valuation methods, provides an estimate of how much total funds will be obtained from the IPO process. , and provide recommendations to the company to increase its valuation. Valuation is done by discounted valuation method using Free Cash Flow of the Firm (FCFF) for 2021 to 2025. The growth rate used is decining growth from 2021 to 2025 by 10% decreased to 5% and will be stable at the level of 5%. The discount rate used is 15.01%. The calculation results obtained the intrinsic value of the company IDR 5,646,184 million. The estimated fair share price of PT XYZ by DCF method is IDR 7,513 per share. The estimated fair share price value of PT XYZ by the Relative Valuation method using a weighted average market value PER, PBV, EV/EBITDA is IDR 5,231 per share. With both the value of the DCF and Relative Valuation methods, it is estimated that the price per share is between IDR 5,231 to IDR 7,513. At the time the IPO was conducted, share ownership by longdiluted shareholders was diluted to 76.92%. The estimated funds to be obtained from the sale of shares during the IPO process are IDR 1,179,334,850,568 to IDR 1,693,814,324,664. To increase the intrinsic value of the company can be done by increasing the EBIT value, managing the capital structure, and increasing the company's growth rate. In order for the value of the shares to be offered at the time of the IPO is attractive, then the value of the shares adjusted to the market price of the competitor's shares and the number of shares offered will adjust to it.