The Securities Crowdfunding (SCF) and Initial Public Offering (IPO) schemes are the two main instruments offered by the Indonesian capital market to support corporate funding, a senior official at the Indonesia Stock Exchange (IDX) has said.
“SCF is similar to what we do at the Stock Exchange, which is to provide a means to bring together companies that need funds with investors. The difference is, SCF has a maximum funding limit, while IPO does not have a maximum limit,” Head of the Listed Company Development Division of the IDX, Listyorini Dian Pertiwi, told Indonesia Business Post, on Thursday, November 21, 2024.
Through SCF, maximum funding is limited to Rp250 billion (US$15.7 million), in accordance with Financial Services Authority (OJK) Regulation No. 53 on Public Offerings and Capital Increases by Small-Asset Issuers or Medium-Asset Issuers. This approach is designed to support small and medium-sized enterprises (SMEs) with assets below Rp250 billion.
On the other hand, companies that want to raise more funds can turn to IPOs, which provide maximum unlimited flexibility, although subject to stricter regulations such as OJK Regulation No. 7, which regulates on companies with assets above Rp250 billion.
Companies that use SCF have simpler access to funding, while IPOs open up wider opportunities for established companies to obtain funding above Rp250 billion.
“SCF and IPO complement each other as part of a company’s funding journey in the Indonesian capital market,” Dian said.
Acceleration board
To support Micro, Small and Medium Enterprises (MSMEs), the IDX provides an Acceleration Board with simpler regulations compared to listing on the Development Board or Main Board. This board is designed for companies with assets below Rp250 billion, with no minimum asset limit and operational period, as long as they already have business revenue.
“We simplify the regulations on the Acceleration Board to make it more affordable for MSMEs, including lower listing fees. However, companies with assets above Rp250 billion cannot use this board,” Dian said.
Another advantage of SCF is that companies that are losing money can still conduct an IPO. However, companies are advised to pay attention to profitability.
“Investors are certainly more interested in companies that are already profitable. However, an IPO is about future prospects. Investors will still look at the company’s track record and ability to manage funds,” she cited.
“With SCF supporting MSMEs and IPOs offering greater opportunities, the Indonesian capital market continues to strengthen its inclusive funding ecosystem. This combination is expected to drive economic growth through the development of companies on various scales,” she concluded.
