"Dual Listing" May Be Best Option for GoTo

KOMPAS/RADITYA HELABUMI

Gojek and Tokopedia officially announced the merger agreement through the formation of the GoTo Group on Monday (17/5/2021).

JAKARTA, KOMPAS — Listing its shares on two stock exchanges, or a dual listing, is considered to be the most feasible option for GoTo. With an estimated valuation of about US$18 billion, or about Rp 261 trillion at an exchange rate of Rp 14,500, the technology giant formed from the merger of Gojek and Tokopedia will be among the top 10 companies listed on Indonesia Stock Exchange (IDX).

Based on its valuation, if GoTo offers about 10 percent of its shares in its initial public offering (IPO) through the IDX, it will provide a stock supply worth about Rp 21 trillion in the local market. This amount is considered too large to be absorbed in the domestic market. In the history of the stock exchange, the largest IPO on the local stock exchange was Rp 12.4 trillion, when coal company PT Adaro Energy sold some of its shares. PT Indofood CBP Tbk was in second place with IPO proceeds of about Rp 6.2 trillion.

Also read: GoTo Strengthens Market Share Coverage

"If the number of the shares released is too large, the market will not be able to absorb them all. GoTo must also look for strategic investors to act as standby buyers," the head of investment at Reswara Gian Investa, Kiswoyo Adi, said in Jakarta on Tuesday (18/5/2021).

According to him, listing shares on two exchanges, or dual listing, is one of the most feasible options for GoTo. The Nasdaq Exchange in the United States, for example, has a large capitalization that could accommodate GoTo’s listing.

GoTo\'s competitor, Grab Holding Inc, is ready to list its shares on the Nasdaq Exchange. Grab recently merged with special-purpose acquisition company Altimeter Growth Corp, securing a valuation of $39.6 billion.

Valuation that is too high can make stock prices stagnant or even drop.

Data Analysis Company CB Insight predicts that, after the merger and listing, the valuation of GoTo will increase to $40 billion. Kiswoyo noted that GoTo should be able to perform well after floating its shares on the exchange, so as to avoid risks of valuation inflation. Valuation that is too high can make stock prices stagnant or even drop.

KOMPAS/RADITYA HELABUMI

Gojek and Tokopedia officially announced the merger agreement through the formation of the GoTo Group on Monday (17/5/2021).

East Ventures co-founder and managing partner Willson Cuaca, who was contacted separately, estimated that two-thirds of Indonesian consumers\' daily transactions were conducted through GoTo’s platforms. GoTo offers services ranging from food delivery and transportation to an online marketplace and payment systems. Thus, securing an estimated valuation of $40 billion after its listing on the stock market is quite reasonable for GoTo.

According to him, GoTo ’s plan to float its shares on the exchange will set a precedent, and other Indonesian tech startups may follow in its footsteps. "For Indonesia, this (listing shares on the stock exchange) marks a new era. The Indonesian stock exchange used to be dominated by mining, agricultural and telecommunication companies, and now it is heading to the digital consumer sector," said Willson.

Gojek’s head of corporate affairs, Nila Marita, said GoTo\'s priority was to ensure smooth and optimal integration. Conducting an IPO is one of the main goals of the GoTo Group to support the group’s growth to the next level.

Meanwhile, the vice president for corporate communications of Tokopedia, Nuraini Razak, shared the same view. For now, the GoTo Group strives to maximize services to consumers and partners.

The idEA believes a number of industrial players continue to map out the market needs and determine their competitive strategies.

According to the chairman of the Indonesian E-commerce Association (idEA), Bima Laga, the Indonesian digital industry has great potential to grow as one of the big players in the world. The idEA believes a number of industrial players continue to map out the market needs and determine their competitive strategies.

KOMPAS/RADITYA HELABUMI

Gojek and Tokopedia officially announced the merger agreement through the formation of the GoTo Group on Monday (17/5/2021).

The Gojek-Tokopedia merger is believed to be able to raise the prestige of the Indonesian digital industry and the workforce involved in it. The merger of the two companies paved the way for technology start-up companies to become targets of investors. (JOE/MED/DIM)

(This article was translated by Hendarsyah Tarmizi).