Transformer Manufacturer Trafoindo Prima Plans to Raise Rp 480b in June IPO
Jakarta. Trafoindo Prima Perkasa, an electrical transformer manufacturer, seeks to raise up to Rp 480 billion ($36 million) from an initial public offering next month to expand its business in the wake of rising demand created by the government's push to increase access to electricity in the country.
Trafoindo has four factories in Jatiuwung, Banten province where it produces a range of transformers to support electricity networks. The company sells its products under the brands Trafoindo and Proteksi Goodrun, while it also offers maintenance and aftersales service to its clients.
"The demand for our products will keep increasing in the coming years as it is in line with the government's ambitious 35,000-megawatt power plant construction program," Trafoindo Prima Perkasa president director Suryoni Limputra said on Monday (22/05). He was referring to the government's program to boost the national power capacity to spur economic growth.
The company supplies about 57 percent of its products to state-owned utility firm Perusahaan Gas Negara (PLN). The remainder is sold to companies such as Schneider Electric Indonesia – local subsidiary of the French electricity distribution and automation management specialist – and state-owned construction firm Adhi Karya.
Trafoindo will sell 1.2 billion new shares, or the equivalent of 16.67 percent of its enlarged capital, at between Rp 320 and Rp 400 each in an IPO. The company appointed state-owned brokerage firm Bahana Sekuritas as the underwriter.
The company scheduled the book building for May 22-30, while the shares will be offered for on June 13-14. Listing on the Indonesia Stock Exchange (IDX) will take place on June 20.
About 65 percent of the proceeds from the IPO will be used to increase the capacity of its two plants and to establish a warehouse for raw materials and finished products in Tangerang, Banten.
The rest of the proceeds will be used as working capital, including the repayment of debt and to fund production.
Trafoindo will undertake a roadshow in Kuala Lumpur and Singapore on May 25-26 to promote its IPO to foreign investors.
Binaartha Sekuritas analyst Nafan Aji said Trafoindo's prospects are bright because a large chunk of the company's IPO proceeds will be used for business expansion.
"The company will support President Jokowi's electricity procurement [initiative]," Nafan told the Jakarta Globe, referring to President Joko Widodo by his popular nickname.
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