IPO Mitra Keluarga Karyasehat on the Indonesia Stock Exchange
On Tuesday (24/03), Indonesian hospital operator Mitra Keluarga Karyasehat became the second company to list on the Indonesia Stock Exchange (IDX) in 2015. It turned out to be a highly successful initial public offering (IPO) as the company’s shares surged 24.7 percent on its trading debut, reflecting investors’ solid confidence in healthcare stocks. Mitra Keluarga, subsidiary of pharmaceutical company Kalbe Farma, raised IDR 4.4 trillion (USD $341 million), hence constituting the largest IPO since Garuda Indonesia’s IPO in 2011.
Michael Steven, President Director of Kresna Graha Sekurindo (lead underwriter for the IPO), said that Mitra Keluarga’s shares were ten times oversubscribed, reflecting investors’ appetite for stocks in Indonesia’s health-care sector. Due to the government’s universal health-care program, implemented in 2014, hospital services and the pharmaceutical industry are expected to grow in the years ahead. As a consequence, healthcare shares have become expensive, generally.
Moreover, as there has been a long history of public underinvestment in Indonesia’s hospital industry, private players have been given room to tap this potential. Data from the Indonesian Health Ministry show that the country currently has a total of 2,391 hospitals, of which 64 percent are operated by the private sector, while the remainder are government-owned. Indonesian’s health-care spending stood at 3.4 percent of per capita income in 2013, up from a mere 2 percent one decade earlier. Meanwhile, per capita income more than tripled during the same period to IDR 36 million (USD $2,790).
Mitra Keluarga offered 261 million shares, 18 percent of its enlarged equity, at a price of IDR 17,000 (USD $1.32) per share. Before the IPO, 66 percent of the company’s shares were owned by Lion Investment Partners BV, while the remaining 34 percent were owned by Griyainsani Cakrasadaya.
Proceeds from the IPO will be used to construct seven new hospitals over the next five years. Currently, the company already operates 11 hospitals on Java. After Siloam International Hospital’s IPO in 2013, Mitra Keluarga is Indonesia’s second private hospital operator to list on the IDX. Back then, Siloam International Hospital (Indonesia’s largest private hospital operator), raised IDR 1.4 trillion.
In the first nine months of 2014, Mitra Keluarga generated revenue of IDR 1.47 trillion (USD $1.1 billion) and net profit of IDR 406 billion (USD $31.5 million).
Further Reading:
• IPO News Indonesia Stock Exchange: Mitra Keluarga Karyasehat