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wo plantation companies, PT Austindo Nusantara Jaya and PT Dharma Satya Nusantara, have decided to enter the capital market rather than to approach banks to seek funding for their business expansions.

Austindo said the company had raised Rp 400.02 billion (US$40 million) from the sale of 10 percent of the company'€™s shares during a recent initial public offering (IPO), while Dharma Satya expects to pocket between Rp 890 billion and Rp 1.07 trillion from the company'€™s IPO, which will take place between May 31 and June 3.

Austindo, which runs oil palm plantations, will use 60.4 percent of the IPO proceeds as capital expenditure for its subsidiaries, 28.3 percent to pay off bank loans, 8.5 percent to build infrastructure and support facilities for its sago business, and the remaining 2.8 percent for its biogas business.

Austindo, which listed its shares on the Indonesian Stock Exchange (IDX) on Wednesday, was the eighth company to be listed on the IDX in 2013 and was the second plantation firm to enter the stock market this year, after PT Multi Agro Gemilang Plantation (MAGP) in January.

 Austindo'€™s shares, sold under the code '€œANJT'€, received a lukewarm response from investors during its debut. The company'€™s share price opened at Rp 1,210, 0.8 percent higher than its IPO price of Rp 1,200. The shares reached their peak at Rp 1,280 an hour after trading began.

However, they fell to Rp 1,190 a minute later and continued to fluctuate between Rp 1,180 and Rp 1,250 throughout the day. They closed at Rp 1,190, down 0.8 percent from the IPO price.

Following its IPO, Austindo is now 40.3 percent owned by PT Memimpin Dengan Nurani; 40.3 percent by PT Austindo Kencana Jaya; 4.7 percent by George Santosa Tahija; 4.7 percent by Sjakon George Tahija; 10 percent by the public, and the remainder by the Tahija Foundation.

Meanwhile, Dharma Satya said it planned to off-load a maximum of 500 million shares, which represent 21.3 percent of its enlarged shares, to finance its business expansion. The shares are priced between Rp 1,780 and Rp 2,150. PT BCA Sekuritas and PT Ciptadana Securities will be acting as underwriters for the IPO.

 Dharma Satya president director Djojo Boentoro said that within the next three years, it would spend $270 million on land expansion and the construction of two new palm oil mills.

 Each mill will cost Rp 180 billion and will have a production capacity of 60 tons per hour. With the new mills, Dharma Satya'€™s total production capacity will increase to 450 tons per hour from its current 350 tons per hour from its existing five mills.