Indonesia Tobacco is targeting to raise up to $4.38 million in its initial public offering in July as it seeks to expand into the Indian market by way of exports.
Headquartered in East Java, the company makes 22 products with its flagship cigarette hand-rolled product called Manna. The company has a strong presence in the eastern part of Indonesia such as Papua and Sulawesi.
The company will use the IPO proceeds to meet working capital needs such as procurement of raw material. It also plans to market the products across the country and also overseas.
“Indonesia Tobacco will partner with a company in India to help with the distribution of the products. The partnership hopefully will finalise after the IPO,” Indonesia Tobacco independent commissioner Samsul Hidayat told DEALSTREETASIA.
Currently, the company’s export contribution to the sales is only 2-3 per cent with Malaysia, and Singapore as its two international main market destinations. By making inroads into India, the company targets to increase its export contribution to 30 per cent, Indonesia Tobacco president director Djonny Saksono told DEALSTREETASIA.
“Such targets are not easy for us. We expect to achieve that in several years,” Djonny said.
Indonesia Tobacco will sell 274 million shares, equivalent to 29.13 per cent of its enlarged capital. The company plans to sell its shares in the price range of Rp 180 ($0.03 cents) to Rp 230 ($0.016) apiece.
The book building process will end on May 31, before the shares will be offered to investors on June 25-July 1. The company will list on the IDX on July 4.
The company appointed a brokerage firm Philip Sekuritas Indonesia as the underwriter.