Coal miner jumps by limit in biggest Indonesian IPO of 2024

Bloomberg | December 5, 2024 | 

Coking coal. (Image: Adobe Stock)

Shares of coal miner PT Adaro Andalan Indonesia jumped by the stock exchange’s limit in their first day of trading, in a show of demand for Indonesia’s largest initial public offering in about a year and a half.


The Jakarta-based company’s stock gained 20% to 6,650 rupiah, versus its IPO price of 5,550 rupiah apiece, in trading Thursday. The surge triggered the exchange’s automatic limit and pushed the miner’s market capitalization to $3.3 billion.

The firm holds the thermal coal assets of PT Alamtri Resources Indonesia — formerly known as PT Adaro Energy Indonesia — which said in September it was separating them to access more sources of financing. Alamtri is one of several Indonesian miners diversifying away from the fossil fuel through investments in metals like nickel, gold and aluminum.

Unlike peers that diversify into green ventures, Adaro Andalan “has no immediate need to follow suit and will continue to operate as a pure-play coal,” analysts at PT Verdhana Sekuritas Indonesia, including Michael Ng, wrote in a note. Verdhana estimates the shares could rise 93% from their IPO price as it fully leverages it cash flow for dividends.

Adaro Andalan’s listing, which raised $272 million, is Indonesia’s largest since gold and copper miner PT Amman Mineral Internasional’s in July 2023. The country’s IPO market has sagged this year amid its presidential leadership transition, with first-time share sales including Adaro raising about $645 million, a far cry from the $3.6 billion raised in all of 2023, according to data compiled by Bloomberg.

The Indonesia Stock Exchange is eyeing 66 IPOs in 2025, IDX President Director Iman Rachman said in an interview last month. More companies are expected to list after uncertainty over the change to new President Prabowo Subianto’s government abates, he said.

The Indonesian sister company of Mr DIY Group (M) Bhd. plans to raise as much as 4.7 trillion rupiah through a listing later this month.

Adaro Andalan recorded a comprehensive profit of $911.2 million for the first half of 2024, according to its prospectus. Its parent company paid a dividend of $2.63 billion last month to encourage shareholders to participate in the listing.

Owners of Alamtri’s stock will have the right to purchase shares in the coal company at a price determined by its trading performance on Thursday, according to its prospectus.