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odern electronics retailer PT Electronic City and transportation company PT Cipaganti Citra Graha are set to launch respective initial public offerings (IPOs) to strengthen their capital structures.

Electronic City expects to raise between Rp 1.34 trillion and Rp 1.79 trillion (US$182 million) from the sale of new shares, which will account for about 25 percent of its enlarged shares. The company plans to sell the new shares at between Rp 4,050 and Rp 5,400.

Meanwhile, Cipaganti is selling 2 billion shares, comprising 1.75 billion new shares and 250 million divestment shares of existing owner PT Cipaganti Global Corporindo.

With the company setting its share price at between Rp 150 and Rp 220, the total funds to be raised from the offering will be in the range of Rp 300 billion and Rp 440 billion.

Electronic City director Fery Wiraatmadja said his company would use 90 percent of the funds raised from the IPO to finance capital and operational expenses.

'€œAs much as 85 percent of the funds will be allocated for capital expenses, incorporating the construction of stand-alone stores and land acquisitions. The other 5 percent of the funds will go to our operational expenses, which will include upgrading our information technology [IT] system,'€ he said.

The remaining 10 percent will be used to pay off debts to Bank Victoria and Bank CIMB Niaga. An IPO prospectus prepared by Electronic City mentions that the retailer has debts of Rp 15 billion at Bank Victoria and Rp 10 billion at CIMB Niaga.

Ingrid Pribadi, president director of Electronic City, said the retailer had opened 13 of the 30 new stores planned for this year.

'€œLast year, we opened 23 new stores,'€ she said, adding that the firm'€™s aggressive expansion would enable the retailer to increase its sales by more than 50 percent.

Cipaganti is also planning to use the funds raised from the capital market to support its growth. The company said that 93.21 percent of the total funds gained from its IPO would be used to purchase new fleets, rejuvenate vehicles, purchase new vehicles to be used as tourist buses, purchase land for vehicle locations, purchase land for offices and renovate office buildings. Meanwhile, the remaining 6.79 percent will be used to support the company'€™s working capital.

Cipaganti finance director Robertus Setiawan said the company expected to purchase an additional 1,950 new vehicles this year, comprising 500 vehicles for the travel business, 500 for lease, 900 taxis and 50 tourist buses.

'€œWe have ordered them and delivery is expected this year,'€ Robertus said.

Cipaganti, which was founded in 1985 as a small vehicle rental outlet in Bandung, has appointed PT Mandiri Sekuritas and PT Kim Eng Securities as underwriters for the offering. The company is expecting to list its shares on the Indonesia Stock Exchange (IDX) on July 9.

Meanwhile, Electronic City has appointed PT Danareksa Sekruritas to be underwriter for its offering and is scheduled to make a debut stock trading on July 3.

With a white-hot capital market, an unprecedented number of IPOs are coming to the boil. Bahana Securities estimates that, if all goes as planned, there will be 15 new listings in June and July this year. Five of these will be banks and finance houses; three will be construction firms and two, companies in the transportation sector.

Ten companies have been listed so far this year, bringing the total number of expected IPOs to 25 for the first seven months of 2013, according to data provided by Bahana. Throughout 2012, the local exchange welcomed only 22 IPOs. In terms of value, the 25 IPOs will amount to an estimated Rp 15.7 trillion, exceeding 2012'€™s level of Rp 10.1 trillion.