Indonesian tower company PT Dayamitra Telekomunikas Tbk, also known as Mitratel, made a weak debut at a local stock exchange on Monday with its shares opening lower than the IPO price of Rp800 apiece.
Mitratel’s shares, which were trading in the region of Rp775 apiece during the Monday session, closed at Rp765 apiece, down 4.38% on its trading debut on Monday. The country’s benchmark stock index closed at 6,723.386, up 0.05%.
Mitratel increased the number of shares on offer, raising Rp18.77 trillion ($1.32 billion) in the country’s second-largest IPO this year after e-commerce company Bukalapak raised $1.5 billion in August.
Mitratel became the 41st company to make its public market debut on the IDX this year. Before Mitratel joined the lineup, the other 40 companies raised more than $2 billion this year, a 518% jump from the same period last year.
Sukarno Alatas, an analyst at Kiwoom Sekuritas, said Mitratel IPO was welcomed with a net sell on its first trading day, indicating that foreign investors were not convinced of the short term to medium-term prospects of its shares.
“Market’s response was not too optimistic and tends to be pessimistic,” Alatas said.
However, Alatas noted the company’s performance promises better prospects in the long run.
According to the company’s prospectus, Mitratel’s recorded a 356% rise in profit at Rp701 billion as of end-June compared with the same period in 2020.
Brokerage company Samuel Sekuritas Indonesia called Mitratel’s financial condition “very healthy” in a note published prior to the IPO, with 43% of its debt maturing after over three years, ensuring the company’s continued expansion.
“Tower market in Indonesia is going through a favourable dynamics related to a policy change that allows foreign companies to invest in tower company,” Theodorus Ardi Hartoko, Mitratel CEO, said in a press conference.
“Besides, 5G technology development will make tower industry grow even further due to the need to expand mobile service coverage across Indonesia,” he said.
The company plans to use the capital for organic and inorganic expansion, including acquiring 6,000 towers to boost its performance.
Indeed, the company’s IPO comes during a time when interest in digital infrastructure assets is rising alongside technology development.
Mitratel, a subsidiary of state-owned telecommunication company Telkom Indonesia, is currently the largest telecommunications tower company in Indonesia with 28,030 towers and 42,016 tenants, exceeding its rival companies Sarana Menara Nusantara and Tower Bersama.
Sarana Menara Nusantara, owned by conglomerate Djarum Group, acquired a majority stake in Solusi Tunas Pratama in September, bringing in 6,422 towers into the company’s 21,575 towers. Tower Bersama has 19,709 telecommunication sites.
PT Indosat, the Indonesian unit of Qatar-based Ooredoo QPSC, also entered a deal in March this year to sell about 4,000 towers to Digital Colony for $750 million.
Sarana Menara Nusantara shares were traded at 1,200, up 1.69% on Monday, while Tower Bersama shares were traded at 2,850 apiece or down 2.40%.