Are you seeking to grow your business without taking on debt? Do you aim for sustainable growth and need substantial capital to support it? Would you like to enhance your company’s credibility and improve access to future financing? If your answer is 'Yes' to all of these, an Initial Public Offering (IPO) could be the perfect solution.

Going public through an IPO offers numerous advantages for a company's growth plans. Beyond providing easier access to public funds, which strengthens the company’s equity base, it also enhances the company's credibility with creditors. Additionally, a public company benefits from increased transparency and improved corporate governance, which in turn helps build greater trust among stakeholders.

For private companies that have traditionally operated under the radar with limited exposure to market participants, pursuing an IPO can be a challenging but exciting first step toward substantial growth. An IPO may be the most effective way to achieve large-scale, sustainable expansion. Therefore, thorough preparation is essential for any company considering this significant move. Below are key factors to keep in mind when deciding to take this pivotal step in your business growth strategy, ensuring a smooth and successful IPO process:

Start with the right step

The IPO process generally consists of five stages: Pre-IPO, IPO Preparation, Share Price Determination, IPO Execution, and Post-IPO.

The Pre-IPO phase involves defining business growth target and the timeline for achieving them, assessing the company’s resources and readiness for an IPO, and more. During this stage, the company must establish clear, strategic objectives for growth, evaluate key internal resources such as human capital and budget, and consider external resources like underwriters.

Before launching an IPO, a company needs to think of a compelling growth narrative to attract potential investors. This narrative should showcase not only past achievements but also the company’s potential for future growth post-IPO. It should clearly outline the reasons for going public and present a strategic vision for long-term expansion. To shape this narrative and successfully guide the IPO process, companies often turn to an underwriter. The underwriter plays a critical role in assessing the company’s performance, growth potential, and other key factors that impact the success of the IPO and the company’s future path.

The next stage is IPO preparation, which involves several essential steps: ensuring compliance with capital market authority regulations, conducting thorough due diligence, securing regulatory approvals, and organizing roadshows to introduce the company to potential investors. Due diligence is particularly crucial, as it helps evaluate the company’s strengths and identify any risks that could affect its long-term viability.

Before proceeding with a preliminary offering or bookbuilding, the company must submit a public offering statement for the IPO to the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX). Once the OJK grants approval, the roadshow becomes a vital step. The roadshow serves to inform potential investors and mitigate the risk of asymmetric information—where information imbalances between the company and the public could harm the company’s reputation. By addressing these gaps, the company can promote greater transparency and build trust among investors.

Following IPO preparation, the next stage is Share Price Determination. During this phase, the company evaluates and sets the share price to be offered to the public, based on the results of the preliminary offering or bookbuilding process. This valuation is influenced not only by the company’s expected value but also by investor interest and demand during the bookbuilding period.

The fourth stage is IPO Implementation, where the company’s shares are listed and traded on the stock exchange for the first time. This is followed by the final stage: Post-IPO. During this phase, the company submits various reports required by governance regulations, such as periodic financial statements, to relevant authorities to ensure transparency and proper disclosure. Beyond reporting, the Post-IPO stage also involves ongoing communication of the company’s growth story, including its post-IPO performance and growth potential. This continued engagement with investors and potential investors helps to maintain interest, expand the investor base, and support the company’s long-term, sustainable growth.

An IPO can truly be a game changer for any business.  Building a successful company today requires more than just organic growth, as this alone may not be enough to achieve the scale needed to thrive amidst evolving market dynamics and intense competition. Innovations like IPOs offer a fast, large-scale, transparent, and sustainable way to grow. However, navigating the IPO process requires the expertise of skilled professionals to ensure a seamless transition.

With over 24 years of experience, Mandiri Sekuritas, a subsidiary of Bank Mandiri, provides comprehensive, end-to-end IPO services. Our expert team is ready to guide you through every phase—from Pre-IPO planning and execution to Post-IPO success. Contact Mandiri Sekuritas today to explore the potential of taking your business public.