Minimum Free Float Requirement Prompts Some Listed Companies to Go Private
KONTAN.CO.ID – JAKARTA. Several listed companies are struggling to meet the minimum free float requirement of 15%. Some have even chosen to leave the Indonesia Stock Exchange (IDX).
Several companies currently in the process of going private have not met the free float requirement. PT Era Graharealty Tbk (IPAC), for example, had a free float of 9.4% as at September 2026.
At an extraordinary general meeting of shareholders (EGMS) on 21 October 2026, IPAC secured approval to change its status to a private company. The approval included a plan by APAC Investment 2 Pte to buy shares held by the public through a voluntary tender offer (VTO) at Rp250 per share.
Two telecommunications tower companies affiliated with the Djarum Group, PT Inti Bangun Sejahtera Tbk (IBST) and PT Solusi Tunas Pratama Tbk (SUPR), had already secured shareholder approval to go private.
There have also been reports that Malaysia’s CIMB Group Holdings is considering privatising and delisting PT Bank CIMB Niaga Tbk (BNGA), citing the need to adjust to the minimum free float requirement.
As at September 2026, BNGA had 1.86 billion free-float shares, equivalent to 7.5% of its total shares. A number of other foreign-owned banks are in a similar position: PT Bank QNB Indonesia Tbk (BKSW) has a free float of 6.67%, PT Bank Nationalnobu Tbk (NOBU) 7.34%, PT Bank Danamon Indonesia Tbk (BDMN) 7.53%, and PT Bank IBK Indonesia Tbk (AGRS) 7.55%.
Meanwhile, the Financial Services Authority (OJK) is accelerating plans to raise the minimum free float to 15%. The move is part of eight action plans to accelerate reforms to the integrity of Indonesia’s capital market, in response to scrutiny from global index providers.
However, IDX data as at 31 March 2026 showed that 328 listed companies had yet to meet the 15% minimum. Their market capitalisations and compliance deadlines vary.
Of these, 247 companies with market capitalisations below Rp5 trillion had not reached the 15% threshold. They have until 31 March 2029 to comply.
Another 63 companies, each with a market capitalisation of at least Rp5 trillion and a free float below 12.5%, must meet the requirement in stages: 12.5% by 31 March 2027 and 15% by March 2028.
A further 18 companies, each with a market capitalisation of at least Rp5 trillion and a free float of between 12% and 15%, must reach the 15% threshold by 31 March 2027.
Budi Frensidy, a capital market observer at the University of Indonesia, said he had long opposed a uniform increase in the minimum free float to 15%.
He cited Saudi Aramco, one of the world’s largest companies, whose free float is only about 2.5%. SpaceX also floated less than 5% of its shares in its initial public offering.
“This shows that a low free float is not always a problem. A 5% free float in a company with a market capitalisation of Rp1,000 trillion is worth Rp50 trillion, far more than a 30% free float in a company valued at Rp1 trillion,” he said.
Moreover, Budi said, increasing the free float does not automatically boost liquidity. If hundreds of listed companies have to add shares to the public market within a short period, the question is who will absorb the additional supply.
“Without an increase in demand, share prices could instead come under pressure. In those circumstances, it is understandable that some controlling shareholders would prefer to take their companies off the exchange,” he said.
Budi said decisions by IPAC, IBST and SUPR to delist were not entirely due to the free float rules. Nevertheless, he said, the cases should prompt the IDX and OJK to review the policy.
He warned that a policy intended to improve market quality should not end up reducing the number of high-quality listed companies and the investment choices available to the public.
In his view, the 15% requirement should be reconsidered, rather than merely given a longer deadline. Free float rules should take account of market capitalisation, the value of shares held by the public and trading liquidity.
Capital market observer Irwan Ariston said a 10% free float threshold would be sufficient, noting that shares with lower free floats elsewhere in the world are still included in the MSCI index.
He said requirements for companies to be listed on the IDX should be distinguished from requirements for shares to qualify for global indices. Indonesian capital market policy should reflect businesses’ financing needs, investor protection and the characteristics of the domestic market.
Irwan proposed that the IDX review its minimum free float requirement and set it at 10%, alongside mandatory disclosure of shareholdings affiliated with controlling shareholders, including their ultimate beneficial owners.
In his view, shares that are effectively still controlled by a controlling group should not count as free float, even when registered under different names.
“This would ensure that stronger rules focus on transparency and genuinely independent public ownership, rather than simply the size of the percentage,” Irwan said.
He compared the proposal with Singapore’s stock market, which requires a minimum public shareholding of 10% for companies already listed, and the UK, which sets a 10% minimum for admission to listing for commercial companies.
Nasdaq, meanwhile, considers the number and value of publicly held shares and the distribution of shareholders, rather than applying a uniform 15% threshold. All three markets still have shares included in the MSCI index.
“If more time is needed to make adjustments, it should be granted on the basis of demonstrable constraints and a measurable compliance plan,” Irwan said.