IPO Garuda's gain; underwriters' loss
During its recent initial public offering (IPO), shares of flag carrier Garuda Indonesia were not fully purchased by investors, with 47 percent bought by underwriters, data from the Indonesia Stock Exchange (IDX) shows.
According to the IDX, 3.01 billion shares (47 percent) of the 6.33 billion initially offered were bought by underwriters, while the remaining 3.32 billion (53 percent) were absorbed by investors.
Underwriters for the IPO comprise Mandiri Sekuritas, Danareksa Sekuritas and Bahana Securities, while the international selling agents include UBS AG and Citigroup Inc.
The underwriters spent Rp 1.41 trillion purchasing unsold shares, in reference to the IPO prices of Rp 750 apiece.
"It's an underwriters' job and risk to buy unsold shares. But we won't buy shares with bad fundamentals, said Marciano Herman of Danareksa Sekuritas.
While underwriters spent Rp 1.41 trillion, Garuda secured Rp 3.3 trillion (about US$350 million) in the initial offering.
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