Amid 5.75% BI Rate, IPO Companies Prioritise Debt Repayment

A number of companies are preparing for their initial public offerings (IPOs) on the Indonesia Stock Exchange (IDX) towards the end of the first half of this year. Citing IDX public disclosures, six prospective issuers are scheduled to list on the capital market in July 2026. The six companies are PT Niramas Utama Tbk. (JELI), PT Prodia Diagnostic Line Tbk (PRDL), PT Esa Medika Mandiri Tbk (EMMI), PT Nitrasanata Dharma Tbk. (JECX), PT Bach Multi Global Tbk (BACH), and Raffi Ahmad’s company, PT RANS Entertainment Indonesia Tbk (RANS). This IPO phenomenon is quite interesting. Amid a trend of rising benchmark interest rates by Bank Indonesia (BI), most prospective issuers are prioritising the use of IPO proceeds to repay bank debts. PT Niramas Utama Tbk. (JELI) will release 350 million shares, or 25.93% of its issued and paid-up capital, with a nominal value of Rp100 per share. The shares offered to the public are priced in the range of Rp900 to Rp1,120 per share, with the stock listing on the IDX scheduled for 7 July 2026. One of the uses of the IPO proceeds, approximately 10.63%, will be allocated to repay a portion of the principal of short-term debts. Meanwhile, Raffi Ahmad’s company, PT RANS Entertainment Indonesia Tbk (RANS), is offering up to 2.52 billion new shares, equivalent to 20.02% of the issued and fully paid-up capital after the IPO. In this corporate action, RANS has set an offering price range of Rp135 to Rp170 per share, with an estimated listing date on the IDX of 10 July 2026. One of the uses of the IPO funds, around 6.98%, will be used for the accelerated repayment of all principal debt to PT Bank Negara Indonesia (Persero) Tbk. Next, PT Bach Multi Global Tbk (BACH) is offering 615 million new shares, equivalent to 15.06% of the issued and fully paid-up capital after the IPO. The offering price is in the range of Rp400 to Rp500 per share, and the stock listing on the IDX is scheduled for 7 July 2026. A portion of the IPO funds, approximately Rp91.02 billion, will be used to pay part of a loan to PT Bank Permata Tbk. Furthermore, PT Nitrasanata Dharma Tbk. (JECX) will conduct an IPO of up to 487,983,500 common shares, consisting of 325,322,300 shares from the issued and paid-up capital and 162,661,200 shares owned by DR. Dr. Waldensius Girsang, representing 5% of the issued and paid-up capital, with the total offering representing a maximum of 15% of the issued and paid-up capital at a value of Rp16 per share. The price offered to the public is in the range of Rp1,200 to Rp1,400 per share, with the stock listing on the IDX on 7 July 2026. The IPO proceeds will see Rp40 billion used by the company for early repayment of a portion of its principal loan to PT Bank Central Asia Tbk, and Rp100 billion used for early repayment of a portion of its principal loan to PT Bank HSBC Indonesia. Additionally, PT Esa Medika Mandiri Tbk (EMMI) is offering up to 522.86 million new shares, representing a maximum of 30% of the company’s issued and fully paid-up capital after the IPO. In this corporate action, the company is offering shares in the price range of Rp446 to Rp515 per share, with the IDX listing scheduled for 8 July 2026. A total of Rp50 billion will be allocated for the repayment of a portion of the company’s principal loans. Finally, PT Prodia Diagnostic Line Tbk (PRDL) is offering up to 522.9 million new shares, equivalent to 30% of the issued and fully paid-up capital after the IPO. PRDL has set an offering price range of Rp100 to Rp120 per share, with the IDX listing scheduled for 9 July 2026. The use of IPO funds by this issuer is more oriented towards improving its balance sheet rather than aggressive expansion. Of the total funds raised, approximately Rp35.67 billion will be used to repay principal loans to PT Bank Central Asia Tbk (BCA) and PT Bank Pan Indonesia Tbk (Panin Bank). This means that more than half of the IPO proceeds could potentially be used for debt repayment, rather than for building new factories, significantly increasing production capacity, or conducting large-scale market expansion. In a high-interest-rate environment, these prospective issuers tend to prioritise strengthening their capital structure and reducing interest burdens over pursuing risky expansion. Moreover, amid the trend of Bank Indonesia raising its benchmark rate, which is expected to keep borrowing costs elevated, companies are choosing to improve their balance sheets to better withstand interest rate pressures while boosting investor confidence in their post-IPO financial health. This phenomenon indicates that fundraising strategies in the capital market are shifting. Amid more expensive funding costs, companies are not only pursuing additional capital for expansion but are also using the IPO as a momentum to improve their capital structure and lower their debt ratios. For context, Bank Indonesia, during its Board of Governors Meeting on 17-18 June 2026, decided to raise the BI Rate by 25 basis points to 5.75%. In less than one month, the central bank has raised its benchmark interest rate three times, with a total increase of 100 basis points.