STOCK VALUATION OF PT BANK RAYA INDONESIA TBK. AFTER THE IMPLEMENTATION OF RIGHTS ISSUE

• Main Author: Hariyanto, Ricky
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/67118
• Institution: Institut Teknologi Bandung

During 2021 many banks are racing to transform its business operations into digital banks, and their share price has increased significantly due to promising projections. One of them is PT Bank Raya Indonesia (AGRO), a company that is converting its business operations to digital and is targeting 10% of gig economy workers who have US$ 314 billion dollars valuation by 2025. To realize business transformation, AGRO has issued 4.64% new shares and earned Rp 1,159,999,703,500 with a ratio of 620,000:30,141. The purpose of the fund itself is to allocate 20% of its equity to distribute digital loans. According to management, AGRO will stop the expansion of the middle-class credit segment and focus on distributing retail segments that have higher interest yields with short terms. The purpose of this study is to determine the intrinsic value of AGRO shares and provide an overview or recommendation to investors whether AGRO shares are worth buying or not after the rights issue, and to assess whether the rights issue can support the transformation of AGRO into a home for fintech and gig-economy. This research will use qualitative and quantitative methods. The qualitative method will use external analysis through PEST analysis, while internal analysis will analyze financial performance and corporate actions and concluded with a SWOT analysis to find out the strengths, weaknesses, opportunities, and threats faced by AGRO. The method used quantitatively is multiple regression to determine the projection of third-party funds, then projecting free cash flow to equity to determine the valuation. The result of intrinsic value using free cash flow for equity is 218 while the market price is 840, this comparison shows that the current market price is extremely overvalued, and it is risky to invest in AGRO stocks. Even though the gig economy market share is quite promising, AGRO's capabilities, which only have a core capital of 2 trillion, are still unable to support AGRO's vision as a home for fintech and the gig economy.