Indonesia’s IPOs slow to a trickle after regulator raises listing bar

[JAKARTA] Indonesia’s initial public offering market is heading for one of its quietest years in recent memory as market turbulence, global uncertainty and tougher listing standards put the brakes on new listings.

Only seven companies have gone public on the Indonesia Stock Exchange (IDX) so far this year, raising about 2.16 trillion rupiah (US$120.7 million), exchange data shows.

With just three months remaining, the tally trails the 26 IPOs recorded in 2025, 41 in 2024 and 79 in 2023.

The figure also falls far short of IDX’s initial target of 50 listings for 2026. As at Sep 6, seven companies were in the IPO pipeline, with potential proceeds of up to four trillion rupiah.

The path to market has been steeper. IDX said it now rejects about 60 per cent of listing applications, up from 20 to 30 per cent previously.

Mohit Mirpuri, senior partner for wealth management at SGMC Capital, said that Indonesia’s market has faced significant turbulence this year, prompting regulators to shift their focus towards strengthening and reforming the capital markets.

“For companies looking to list, there is now a new set of expectations to adjust to,” he told The Business Times.

“The weak market has clearly been cyclical, but the higher standards being introduced by the regulators are a structural change and ultimately a healthy one.”

Mirpuri expects IPO activity to remain subdued this year, but is more optimistic about a recovery in 2027 as reforms take hold and market conditions improve.

A successful reform process could eventually help improve foreign participation and liquidity, he added.

Quality over quantity

The weaker pipeline could mark a shift towards fewer but higher-quality listings as the exchange and the Financial Services Authority (OJK) raise standards and investors become more demanding over valuations, governance and post-listing performance.

Hasan Fawzi, OJK’s CEO for capital-market supervision, said some prospective issuers have yet to secure regulatory approval, as they need to improve the quality and completeness of their disclosures.

He added that OJK was looking beyond the number of companies going public, with a focus also on the amount of capital raised. The regulator is targeting 250 trillion rupiah in capital-market fundraising this year, with 148.3 trillion rupiah raised as at Tuesday (Oct 6).

“To meet the target, we will continue to prioritise the quality of disclosures and the readiness of prospective issuers,” he said.

Indonesia’s IPO market was riding a wave of momentum in 2022 and 2023, but the boom also left investors with several cautionary examples as some newly listed companies struggled to sustain valuations after going public.

Some freshly listed companies’ shares have slipped under water, trading sharply below their IPO prices, underscoring the risks of listing in a weak market and the importance of realistic pricing.

Among companies that went public between 2022 and 2025, technology giant GoTo has been one of the worst performers. It listed in 2022 at 338 rupiah a share, with a market capitalisation of about US$28 billion.

By Tuesday, its shares had fallen to 31 rupiah, leaving it with a market value of roughly US$2 billion – about 93 per cent below its listing valuation.

Fierce competition and doubts over its ability to turn growth into profits have taken the shine off the stock. Its removal from MSCI’s Indonesia index over thin trading was another setback.

Indonesia’s IPO slowdown contrasts with stronger activity in Malaysia and Singapore.

Malaysia led South-east Asia in the first half of 2026 with 36 listings that raised US$1.3 billion, while Singapore recorded five IPOs worth US$868 million.

Singapore’s five listings already marked a recovery from just one IPO in H1 2025, and Malaysia completed 60 IPOs for the whole of 2025, the highest annual total in Asean.

Listing against the headwinds

The tighter screening comes as Indonesian authorities seek to strengthen market integrity after a turbulent year for local equities, the rupiah and foreign investor flows.

The Jakarta Composite Index (JCI) fell nearly 29 per cent year on year in the first three quarters, making it one of the weakest-performing major equity markets globally.

Indonesia has been pursuing broader capital-market reforms amid increased scrutiny from global index provider MSCI over the country’s investability, with concerns that could ultimately put its emerging-market status at risk.

The authorities have responded by increasing disclosure requirements, strengthening investor classification, introducing a framework for high shareholding concentration and moving towards a minimum free-float requirement of 15 per cent.

For prospective issuers, the difficult market backdrop is adding another layer of caution.

Liza Suryanata, head of research at Kiwoom Sekuritas Indonesia, said that the new requirement for IPO candidates to offer a 15 to 25 per cent free float, depending on their market capitalisation, could also make companies more cautious about listing.

The higher public shareholding requirement means existing owners need to be prepared to sell a larger portion of their holdings to public investors.

“When market valuations are not attractive enough, companies may prefer to wait rather than sell shares at a price they consider too low,” she added.

Companies are also turning to alternative ways to raise capital or provide liquidity to shareholders.

Recent secondary transactions at coffee chain Kopi Kenangan saw co-founder and CEO Edward Tirtanata increase his stake by buying shares from early team members and other shareholders.

The firm said such transactions can provide liquidity to early investors and employees, while allowing capital to be redeployed into newer ventures, potentially reducing the company’s immediate need to pursue an IPO.

Small but attractive pipeline

For some investors, however, the decline is not necessarily a sign that Indonesia’s IPO market is losing its appeal. 

Analysts at Jakarta-based brokerage Stockbit said that tighter screening could benefit companies that are already listed by reducing the risk of market liquidity being spread too thinly, particularly as Indonesia’s equity market remains weak and is largely supported by domestic investors.

SGMC Capital’s Mirpuri said that a smaller IPO pipeline was not necessarily a bad thing if it resulted in better-quality companies coming to market with stronger governance and more realistic valuations.

He noted that companies in sectors with strong structural growth prospects in Indonesia could continue to attract investor interest despite challenging market conditions, pointing to healthcare, natural resources, infrastructure and digital businesses as potential drivers of IPO activity.

But he added that issuers also need to deliver on their promises after listing, warning that overly ambitious valuations could quickly undermine investor confidence if earnings fail to meet expectations.

“Too often we have seen companies list at ambitious valuations and then report significantly weaker numbers in the very next quarter.”