Indonesia’s GoTo IPO success is unlikely to continue, say analysts
By Vinu Lal
07:14, 12 April 2022
Indonesian e-commerce platform GoTo Group’s stock price surged after it was listed on the local bourse on Monday, giving the company a market valuation of $28bn. The initial 21% price rise fell on the next day’s trading as the recent initial public offering (IPO) came under close scrutiny as the firm raised $1.1bn in challenging market conditions.
“GoTo pricing is clearly aggressive and a near-term correction is most likely,” said Lloyd Mathias, business strategist and ex-marketing head, HP Asia, who follows Asian digital economy.
A Tellimer Research note said GoTo’s pricing is 66% higher than Grab Holdings (GRAB) in terms of enterprise value to gross merchandise value (an indicator used to value e-commerce enterprises). As of 11 April, close competitor Grab Holdings lost a whopping 70.89% of its value ever since its biggest US listing by a Southeast Asian firm last December.
GoTo’s new IPO is clearly bold given the geopolitical risk, soaring inflation and lacklustre peer performance in stock markets, Mathias said.
Grab Holdings (GRAB)
Another local e-commerce platform PT Bukalapak, the most recent high-profile Indonesian technology IPO, lost 69% of its market valuation since it got listed in late 2021. Regional unicorn PropertyGuru, which started trading on the New York Stock Exchange on 18 March after a merger with a special purpose acquisition company, also lost 13.45% value ever since.
Based on the total funds raised, GoTo’s new IPO is the third-largest in Asia and the fifth largest in the world this year. Around 300,000 investors have participated – the highest ever number to take part in an IPO on the Indonesia Stock Exchange (IDX), the company said in a statement.
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High-profile e-commerce platform
GoTo Group was formed last year through the merger of ride-hailing and food delivery unicorn Gojek and domestic e-commerce player Tokopedia.
Positioned as Indonesia’s most high-profile e-commerce platform, the company’s financial investors include Alibaba Group (BABA) and Softbank Vision Fund. GoTo also operates ride-hailing services through Gojek in Singapore and Vietnam, and also does food and parcel delivery in the latter’s market.
“Despite global market volatility, investor interest has been strong, reflecting the rapidly growing demand in Southeast Asia for our on-demand, e-commerce and financial technology services, as well as confidence in GoTo’s position as the largest digital ecosystem in Indonesia,” said Andre Soelistyo, GoTo Group CEO.
ASEAN tech growth market
A Tellimer Research note said operationally ASEAN is one of the most prized regions in emerging markets for technology growth. It also said the underwriter CGS-CIMB – a financial firm headquartered in Ireland but with extensive Southeast Asian interests – will keep 7.8 billion shares which may be used to stabilise GoTo’s share price and limit any slump.
“GoTo’s markets that include Indonesia, Singapore and Vietnam are all key markets relatively stable and growing, which investors believe is a safe haven when it comes to e-commerce models. We saw price-corrections in several such e-commerce IPOs in India too, on the likes of Nykaa, Zomato, policybazaar etc., which I believe will be a short-term affair.” Mathias added.
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