Shares of Jakarta-based PT Nusantara Sejahtera Raya Tbk, which operates the country’s largest cinema chain Cinema XXI, rose almost 17% from its IPO price on its first day of trading on the Indonesia Stock Exchange (IDX).
Cinema XXI’s shares, which had opened at 300 rupiah, rose to 306 rupiah in morning trade before closing at 316 rupiah apiece on Wednesday.
Cinema XXI had raised 2.25 trillion rupiah ($148 million) from its IPO on July 27-31 by issuing 8.3 billion new shares, representing 10% of its stake. The company had priced its shares at 270 rupiah apiece—the lower end of the 270-288 rupiah price band—in its IPO.
Oki Ramadhana, CEO of Mandiri Sekuritas said that retail demand in the IPO was huge, which led to an oversubscription of about 25.7 times. Mandiri Sekuritas was one of the underwriters in Cinema XXI’s IPO along with PT Indo Premier Sekuritas, PT JP Morgan Sekuritas Indonesia, and PT UBS Sekuritas Indonesia.
“We appreciate the positive response from investors, and we will use the funds from the IPO to support our cinema expansions,” added Hans Gunadi, CEO of Cinema XXI in a statement on Wednesday.
As per the IPO prospectus, PT Harkatjaya Bumipersada was the majority shareholder of Cinema XXI with an 80% stake, followed by PT Adi Pratama Nusantara (20%) and Singaporean sovereign wealth fund GIC-backed Salween Investment Private Limited (0.01%).
According to IDX trading data on Wednesday, Harkatjaya and Adi Pratama sold shares in a private placement and call option programme to Salween Investments for about 5 trillion rupiah ($329 million).
Earlier, Harkatjaya and Adi Pratama had announced plans to sell 8% and 2% of their shares, respectively, via a private placement. The two also signed a call option agreement in Dec 2016 with Salween Investment that gives the latter an option to buy 15 billion shares from Harkatjaya and 3.75 billion shares from Adi Pratama.
After the IPO, private placement, and call options, Harkatjaya’s ownership in the company will be reduced to 46%, while Adi Pratama’s stake will fall to 11.5%. Meanwhile, Salween Investment’s stake will increase to 22.51%.
Harkatjaya and Adi Pratama are companies owned by Benny Suherman and Harris Lasmana, founders of Cinema XXI.
The fundraising from the IPO will be used to add more cinema chains in Indonesia, repay debt to PT Bank Rakyat Indonesia, and for working capital needs.
Cinema XXI recorded revenues of 4.4 trillion rupiah in 2022, up more than 243% compared to 1.28 trillion rupiah in 2021. The company booked profits of 505 billion rupiah in 2022 after suffering from losses of 366 billion rupiah in 2021 and 579 billion rupiah in 2020.