Mandiri Sekuritas Prepares to Guide IPO Companies to Meet 15 Percent 'Free Float' Requirement
Jakarta (ANTARA) - PT Mandiri Sekuritas stated that companies in its Initial Public Offering (IPO) pipeline have adjusted to comply with the minimum ‘free float’ (shares held by the public) requirement of 15 percent.
As is known, the Indonesian capital market authority will adjust the minimum ‘free float’ requirement from the current 7.5 percent to 15 percent, with implementation targeted for March 2026.
“Some of them initially had a ‘free float’ below 15 percent, but now they are adjusting. It’s not really a forced adjustment, but rather a necessary one,” said Director of Mandiri Sekuritas, Oki Ramadhana, during a gathering in Jakarta on Wednesday.
According to Oki, the minimum 15 percent ‘free float’ requirement will have a positive impact on the Indonesian capital market, as it will increase the number of shares available to public investors, both institutional and individual.
“If the ‘free float’ is larger, investors will have more shares to buy. In other words, there will be more supply for them to purchase,” said Oki.
If only a few shares are offered to public investors, he added, it can also make it difficult for investors to trade in the aftermarket or secondary market.
“If only a small number of shares are available, it can create problems with tradeability, as investors may not be able to trade in the aftermarket or secondary market,” said Oki.
According to Oki, the regulatory adjustments, including the minimum 15 percent ‘free float’ requirement, will make the Indonesian capital market more liquid.
“It will also be more transparent, and corporate governance will be better. If more shares are offered, and the company is good with strong fundamentals, it would be a shame if they were not owned by investors, both domestic and foreign,” said Oki.
PT Indonesia Stock Exchange (IDX) has estimated that the market will need to absorb around IDR 187 trillion to enable 267 listed companies to increase their ‘free float’ from the current 7.5 percent to 15 percent.
The IDX is prioritizing the initial implementation of the minimum 15 percent ‘free float’ requirement for 49 large-cap companies.
In line with this, the IDX has amended Regulation No. I-A concerning the Listing of Shares and Other Equity Securities Issued by Listed Companies.
One of the regulatory adjustments that will be made by the IDX includes market deepening, which involves increasing the minimum ‘free float’ for listed companies to 15 percent, with implementation targeted for March 2026.
In addition, the Financial Services Authority (OJK) is preparing a plan to provide a special notation for companies that are unable to meet the minimum 15 percent ‘free float’ requirement.
Acting Chairman of the OJK Board of Commissioners, Friderica Widyasari Dewi, or Kiki, explained that the special notation will only serve as an indicator and will not result in the company being moved to a separate board, thereby making it easier for investors to choose shares and protecting investors.