In This Economy! IPOs Abandoned, Bonds Become the Target

Corporate fundraising activity in the Indonesian capital market slowed during the first half of 2026. The deepest decline occurred in the initial public offering (IPO) market, whilst bond issuance remained relatively resilient. Pefindo data shows corporate bond issuance reached Rp87.35 trillion in the first half of 2026, a 3.91% drop compared to Rp90.90 trillion in the same period the previous year. Meanwhile, the number of companies entering the IPO pipeline in the first half of 2026 totalled seven issuers with combined proceeds of approximately Rp2.16 trillion. This figure includes six companies that announced and commenced their IPO process in June, although their listing dates fell on 7-10 July 2026. By comparison, 14 companies conducted IPOs in the first half of 2025, raising a total of Rp7.01 trillion. Thus, the number of IPOs fell by 50%, whilst funds raised plummeted by 69.17%. The Rp2.16 trillion figure stems from the IPO of PT BSA Logistics Indonesia Tbk (WBSA) and the six companies whose offering process began at the end of June. The Indonesia Stock Exchange (BEI) recorded that these seven companies had raised approximately Rp2.16 trillion by 10 July 2026. Two other IPOs included in the first-half 2026 calculation were PT Niramas Utama Tbk (JELI), with proceeds of Rp239.40 billion, and PT Prodia Diagnostic Line Tbk (PRDL) at Rp62.75 billion. The five largest IPOs in the first half of 2025 raised around Rp5.98 trillion, or 85.3% of the total IPO funds for that period. This comparison shows a shrinkage in transaction size. The first half of 2025 featured CBDK and YUPI, each raising more than Rp2 trillion. In contrast, the largest IPO in the first half of 2026 generated only about Rp610 billion. This means the IPO market slowdown was caused not only by a reduced number of companies listing on the exchange, but also by the disappearance of jumbo-sized transactions. The 3.91% decline in debt securities does not yet indicate a severe contraction in the corporate bond market. The base for the first half of 2025 was indeed high, as issuance at that time had surged 48.31% year-on-year. The ratio of new issuance to maturing debt even rose from 140.3% to 158.2%, meaning the value of new issuance was still far greater than the principal of debt that had to be repaid. Multifinance was the most active sector in the first half of 2026, with issuance of Rp12.93 trillion, or 14.8% of the total market. This was followed by pulp and paper at Rp12.84 trillion, holding companies at Rp11.87 trillion, banking at Rp11.69 trillion, and mining at Rp11.58 trillion. The use of funds for investment also surged more than fivefold, from Rp3.14 trillion to Rp19.48 trillion. Conversely, use for working capital fell to Rp44.77 trillion and refinancing declined to Rp23.10 trillion. This indicates that large companies are still willing to finance expansion through debt securities, despite rising funding costs. The IPO market is more sensitive to changes in share prices and risk perception. Companies selling shares when the market is under pressure risk obtaining low valuations, forcing them to relinquish a larger ownership stake to raise the same amount of funds. Pressure is evident from the Jakarta Composite Index (IHSG), which closed at 5,643.19 on 30 June 2026, weakening 34.74% since the start of the year. Foreign investors also recorded net sales of approximately Rp19.63 trillion throughout June. Global sentiment remains unconducive. Geopolitical tensions are driving investors towards safe-haven assets, whilst Bank Indonesia in June 2026 raised the BI Rate by 25 basis points to 5.75% to maintain rupiah stability and anticipate inflationary pressures. Domestically, the BEI tightened scrutiny of prospective issuers’ quality. Amendments to Regulation I-A came into effect on 31 March 2026. The new rules, among other things, set a minimum free float of 15%-25% for prospective issuers, depending on their market capitalisation, and strengthened financial requirements such as positive retained earnings for Main Board listing. These provisions aim to improve the quality and liquidity of new shares, but in the short term they make the preparation and screening process for IPOs more stringent. The entry of seven companies into the first-half 2026 calculation shows that an IPO pipeline remains available. However, the 69.17% drop in funds raised indicates that investors and prospective issuers are opting for smaller transactions. The composition of IPOs is also interesting, as three companies come from the healthcare ecosystem, suggesting that demand for hospitals, clinics, and medical devices is still considered relatively stable. On the other hand, the bond market remains stronger because it offers coupons and payment certainty to investors.