Jakarta. Shares of rubber company Kirana Megatara soared by almost 50 percent during the stock's first day of trading on the Indonesia Stock Exchange on Monday (19/06), due in part to outstanding long-term financial prospects on the back of improving global commodity prices.
Jakarta-based Kirana is a producer of crumb rubber, a key material in manufacturing tires. About 95 percent of the company's products are sold to overseas markets and its clients include global tire makers, such as Goodyear, Michelin, Hankook and Bridgestone.
The company's stock, under the KMTR trading code, rose 49.56 percent at close to Rp 685 (US 5 cents) per share during its debut day of trading, compared to a 0.32 percent gain in the broader index.
Last month, Kirana held an initial public offering and sold its shares to investors at Rp 458 each in May. The company has issued 1.15 billion new shares, equivalent to 15 percent of its total equity at the time and raised Rp 527.8 billion in proceeds.
"We are confident that our [financial] performance this year will be better than last year as global commodity prices are recovering," Kirana's finance director Jenny Widjaja said.
Kirana is the 12th company to go public this year and the 547th listed company on the country's main bourse, the Indonesia Stock Exchange (IDX).
The company plans to allocate 58 percent of the IPO's gains to inject capital into its subsidiaries, while 22 percent of the proceeds will be used to pay back debts. Kirana will allocate the remainder of the proceeds to enlarge its working capital.
Kirana expects to produce 500,000 tons of crumb rubber this year, a 13.6 percent increase from last year's 440,000 tons, and seek to further boost production next year by relocating and upgrading two of the 15 factories it operates in the country.
Bullish about the rise in global commodity prices this year, Kirana has projected its net profit to increase by 50 percent to Rp 315 billion this year.