Indonesian nickel company Merdeka Battery Materials surged as much as 20% in its trading debut on Tuesday after raising 8.75 trillion rupiah (USD 591.82 million) in the country’s third largest initial public offering this year.
The strong debut, coming less than a week after Harita Nickel’s robust listing, signals investors’ growing appetite for Indonesia’s nickel processing sector, which is part of the electric vehicle (EV) supply chain.
Southeast Asia’s largest economy has been stepping up its efforts to become a major player in the global EV supply chain by tapping its nickel reserves, the largest in the world.
Merdeka Battery opened at 805 rupiah on the Indonesian stock exchange, compared with its IPO price of 795 rupiah. The shares later jumped to 955 rupiah, before steadying at 935 rupiah. The local benchmark stock index rose 0.52%.
“The big interest in this IPO signals that investors are very optimistic about the prospects of nickel downstreaming and development of EV battery business that will be done by MBM,” Merdeka Battery’s CEO Devin Ridwan said at the market debut ceremony in Jakarta, referring to Merdeka Battery as MBM.
Trimegah Bangun Persada, also known as Harita Nickel, debuted on the local stock exchange last Wednesday with a positive showing after raising 10 trillion rupiah. The stock has climbed 17% versus its IPO price.
European automaker Volkswagen is planning to partner with Indonesian companies, including the Merdeka group, to source EV battery raw materials, a cabinet minister said on Sunday.
When asked about the potential collaboration, Devin told reporters that the company is discussing the structure of its partnership with Volkswagen but there was no concrete agreement yet.
IPO PRICING
Merdeka Battery, a unit of Merdeka Copper Gold, priced its IPO at the top range of between 780 rupiah and 795 rupiah a share earlier this month following strong interest from sovereign wealth funds, insurance firms and long-only local and overseas investors.
It plans to use the IPO proceeds for loan repayment, working capital and capital expenditure, according to the IPO prospectus.
UBS and Macquarie are the joint global coordinators of the IPO, and are joint bookrunners along with Bank of America and HSBC. The domestic underwriters are Indo Premier Sekuritas and Trimegah Sekuritas Indonesia.
Merdeka Battery’s IPO size ranked as the country’s third largest this year after the listings of Harita Nickel and Pertamina Geothermal Energy, a unit of Indonesian state energy firm Pertamina.
The Southeast Asian nation is one of the world’s hottest IPO markets this year as the government seeks to privatise some state-owned enterprises.
Indonesian share sales quadrupled to some USD 828 million in the first quarter, Refinitiv Eikon data showed, from USD 202 million in the year-earlier period.
Other upcoming IPOs in Indonesia this year include Pertamina Hulu Energi, the upstream arm of Pertamina, that could raise up to USD 2 billion, and state-owned fertiliser company Pupuk Kalimantan Timur that could raise USD 500 million.
