BREN's IPO oversubscribe 135 times raising IDR 3.13 trillion for renewable energy advancement

Published on 09/10/2023 at 10:30 GMT+7 Reading time

PT Barito Renewable Energy (BREN) witnessed an overwhelming response from its IPO, with demand exceeding the minimum pooling requirement by more than 135 times. BREN successfully secured funds amounting to IDR 3.13 trillion.

Nieko Kusuma, the Director of Investment Banking at BNI Sekuritas, expressed his contentment over the high level of investor interest, which was evident during the book building phase and persisted throughout the public offering period. 

BNI Sekuritas is thrilled by the enthusiasm displayed by investors who are eager to support BREN to join the Indonesian Stock Exchange (BEI).

"More than 50 thousand investors have participated in contributing to the creation of a sustainable Indonesian economy rooted in Environmental, Social, and Corporate Governance (ESG) principles," Nieko revealed on October 6, 2023.

Nieko further highlighted that BNI Sekuritas played a pivotal role as the single leading underwriter in facilitating PT Barito Renewables Energy Tbk (BREN) through its Initial Public Offering (IPO).

BREN issued 4,015,000,000 new shares, equivalent to 3% of its fully subscribed and paid-up capital, at an offering price of IDR 780 per share. This valuation has positioned BREN as the renewable energy sector's largest market capitalization company on the BEI.

The final prospectus disclosed that the IPO price was determined through negotiations between the company and the securities underwriting the issuance, taking into account the results of the initial offering (bookbuilding) held from September 18 to 25, 2023.

It's noteworthy that prior to the IPO, the shareholders of Barito Renewables Energy included PT Barito Pacific Tbk (BRPT) at 66.67%, Green Era Energy Pte Ltd at 24.33%, Jupiter Tiger Holdings at 4.5%, and Prime Hill Fund at 4.5%. Barito Pacific is controlled by Prajogo Pangestu.

Theodorus Melvin, an analyst at Stockbit, provided insights into BREN's valuation. He explained that the premium valuation of BREN can be understood in light of the premium market valuation of other companies within the Barito Group, such as BRPT and PT Chandra Asri Petrochemical Tbk (TPIA).

"Despite being more premium compared to PGEO, BREN's valuation is still lower than other Barito Group entities like BRPT with a Price-to-Earning (PE) ratio of 546.6 times and a price to book value (PBV) ratio of 5.3 times. Meanwhile, TPIA has a PE ratio of 111.9 times and a PBV ratio of 5.2 times," elucidated Theodorus.

Theodorus further explained that BREN, as a valuable asset held by BRPT with relatively stable income and net profit performance, is unlikely to be offered at a low valuation.

"BREN continues to exhibit strong fundamentals and is more appealing to investors who view the company in the context of being the 'golden child' of the Barito Group, where most of its companies command premium valuations," concluded Theodorus.

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