By Bernadette Christina, Fransiska Nangoy and Yantoultra Ngui
JAKARTA/SINGAPORE (Reuters) -Merdeka Battery Materials surged 11.3% in its stock market debut on Tuesday, becoming the second Indonesian nickel producer in the past week to make a robust start as a publicly listed company.
Indonesia, Southeast Asia’s largest economy, has been stepping up its efforts to become a major player in the global electric vehicle (EV) supply chain by tapping its nickel reserves, the largest in the world. Nickel is a raw material for making EV batteries. Merdeka Battery’s shares soared as much as 20.1% to 955 rupiah on the Indonesian stock exchange, compared with its IPO price of 795 rupiah. They closed at 885 rupiah. The local benchmark stock index ended 0.5% higher.
The IPO raised 8.75 trillion rupiah ($591.82 million), Indonesia’s third largest this year.
“The big interest in this IPO signals that investors are very optimistic about the prospects of nickel downstreaming and development of EV battery business that will be done by MBM,” Merdeka Battery’s CEO Devin Ridwan said at the market debut ceremony in Jakarta, referring to Merdeka Battery as MBM.
Trimegah Bangun Persada, also known as Harita Nickel, debuted on the local stock exchange last Wednesday with a positive showing after raising 10 trillion rupiah. The stock has climbed 15.6% versus its IPO price.
European automaker Volkswagen is planning to partner with Indonesian companies, including the Merdeka group, to source EV battery raw materials, a cabinet minister said on Sunday.
When asked about the potential collaboration, Devin told reporters that the company is discussing the structure of its partnership with Volkswagen but there was no concrete agreement yet.
IPO PRICING Merdeka Battery, a unit of Merdeka Copper Gold, priced its IPO at the top of a 780-795 rupiah a share range earlier this month following strong interest from sovereign wealth funds, insurance firms and long-only local and overseas investors. It plans to use the IPO proceeds for loan repayment, working capital and capital expenditure, according to the IPO prospectus. UBS and Macquarie are the joint global coordinators of the IPO, and are joint bookrunners along with Bank of America and HSBC. The domestic underwriters are Indo Premier Sekuritas and Trimegah Sekuritas Indonesia.
Merdeka Battery’s IPO size ranked as the country’s third largest this year after the listings of Harita Nickel and Pertamina Geothermal Energy, a unit of Indonesian state energy firm Pertamina.
The Southeast Asian nation is one of the world’s hottest IPO markets this year as the government seeks to privatise some state-owned enterprises.
Indonesian share sales quadrupled to some $828 million in the first quarter, Refinitiv Eikon data showed, from $202 million in the year-earlier period.
Other upcoming IPOs in Indonesia this year include Pertamina Hulu Energi, the upstream arm of Pertamina, that could raise up to $2 billion, and state-owned fertiliser company Pupuk Kalimantan Timur that could raise $500 million.
(Reporting by Fransiska Nangoy and Christina Bernadette in Jakarta, Yantoultra Ngui in Singapore; Editing by Kim Coghill and Muralikumar Anantharaman)
