Singapore’s Tolaram Group and members of the top management of Bank Amar have subscribed to the IDX-listed digital lender’s rights issue. Meanwhile, UBS has upgraded its view on GoTo’s shares from sell to buy with a target price of 160 rupiah apiece.
Tolaram subscribes to Bank Amar’s rights issue
Bank Amar’s majority shareholder Tolaram Group and the digital lender’s own top management have bought shares worth 26.8 billion rupiah ($1.71 million) as part of a rights issue.
Tolaram, a Singapore-based, family-run group, purchased 50 million shares of Bank Amar on Dec 5, 2022 and a further 24.4 million shares on Dec 8, 2022, show IDX filings. Meanwhile, Vishal Tulsian, president director of Bank Amar bought 14.63 million shares of the company. Eka Banyuaji, SME corporate and operations director of Bank Amar purchased 4.77 million shares on Dec 8, 2022.
The move has not significantly altered the bank’s shareholding pattern. Tolaram remains the majority shareholder with a stake of 59.49%, followed by Investree (18.4%), and Bank of Singapore (12.67%).
“With the rights issue, Bank Amar’s core capital will exceed 3 trillion rupiah by end-2022. In 2023, Bank Amar can focus on rapidly growing Tunaiku [a digital lending platform], with a target to increase its asset size to 20-25 trillion rupiah. This will cement its position as a leading digital bank for retail and MSMEs in Indonesia,” said Navin Nahata, managing director of fintech and infrastructure at Tolaram.
Bank Amar issued 1.84 billion shares, priced at 280 rupiah apiece, in its rights issue, through which it aims to raise 1.28 trillion rupiah.
DealStreetAsia had reported earlier that Tolaram and Investree plan to subscribe to the rights issue to significantly enhance their stake and become strategic partners in the lender.
UBS upgrades GoTo shares to ‘buy’
UBS has upgraded its view on IDX-listed GoTo’s shares from Sell to Buy with a target price of 160 rupiah apiece.
UBS recommended a buy on GoTo’s shares based on the expectation that the company will grow its gross merchandise value (GMV) by 16% next year, and 20% for the 2022-25 period. UBS also estimated that adjusted Ebitda will turn positive in the first half of 2025, earlier than the previous estimate of 2025.
“While growth in 2022 has been adversely impacted by re-openings, and substantial cuts in incentives, underlying penetration for both food delivery and e-commerce remains low in Indonesia versus other markets and ride-hailing continues to benefit from the post-COVID recovery. Moreover, take-rates, particularly for e-commerce, remain low by global standards and there is room for improvement,” UBS said in a statement on Monday.
Another reason for the upgrade is that GoTo’s shares have fallen over 70% from the IPO price, and have therefore become attractive compared to peers. UBS said GoTo is trading at an attractive enterprise value (EV)/sales of 2.6 times for 2023, and EV/GMV of 0.12 times, compared with Grab and Sea’s EV/ sales of 2-2.5 times and EV/GMV of 0.3-0.5 times.