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Two nickel IPOs this month point to downstream industry potential
Nickel companies are a driving force behind what is being seen as a record year for public listings in Indonesia and the listings point to the opportunities in Indonesia’s blossoming nickel industry, analysts say.
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This undated photograph shows a rotary kiln electric furnace smelter belonging to Merdeka Battery Materials in Sulawesi. (Merdeka Battery Materials/-)
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ickel companies are a driving force behind what is being seen as a record year for public listings in Indonesia and the listings point to the opportunities in Indonesia’s blossoming nickel industry, analysts say.
PT Trimegah Bangun Persada, a Harita Group nickel mining and processing arm with a significant project in North Maluku, aims to raise around US$667 million in what will be Indonesia’s second-largest initial public offering (IPO) this year. It expects to list on April 12.
PT Merdeka Battery Materials, a subsidiary of Merdeka Copper Gold, of which Chinese battery giant Contemporary Amperex Technology (CATL) is a minority shareholder, is aiming for a price range of Rp 780 (5 US cents) to Rp 795 a share to raise around $583 million. It expects to list on April 18.
Merdeka Battery, which produces a key component of EV batteries, has significant operations in Central Sulawesi and Southeast Sulawesi provinces. The company posted a profit of $32.5 million and revenue of $289.4 million for the nine months ended September and plans to use proceeds from the offering, which would be the third-largest this year, to repay loans and fund operations and capital expenditure.
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Felix Darmawan, a commodity analyst at publicly listed PT Panin Sekuritas, said the nickel products supply chain needed tremendous amounts of capital, as reflected in the relatively large IPOs.
“The two companies' IPOs could be a sign that there is potential for business scale development in Indonesia’s nickel sector,” he told The Jakarta Post on Thursday, adding that business expansion in the sector was largely driven by the projected increase in electric vehicle (EV) adoption in Indonesia, spurred by government incentives for EV purchases as well as ongoing efforts to push for the development of the nickel-processing industry.
