Multifinance firm Pool Advista Finance will utilize fresh funds from its planned initial public offering (IPO) to expand financing, acquire new assets and improve information systems and technology in an attempt to increase its net income.

After the IPO, Pool Advista is optimistic that it can continue to expand financing to productive sectors and increase its net income by 18.5 percent in 2019.

“We expect this year’s net profit to reach Rp 27 billion [US$1.77 million] and Rp 32 billion in 2019,” said Raden Ari Priyadi, the firm’s finance director, on Wednesday after the company’s public briefing in Jakarta.

During the IPO, expected to be held in Nov. 18, the company will release 800 million new shares to the public, or equal to 23.92 percent from the total paid up and issued capital. The shares would be offered for between Rp 125 and Rp 150.

From the stock exchange debut, Pool Advista expects to obtain Rp 100 billion to Rp 120 billion in fresh funds. Half of the funds will be used to develop the company’s infrastructure, while the remaining will be allocated to expand financing.

The company is set to open two branches and further improve its IT systems.

Raden explained the company would purchase the Rp 45 billion building in which its headquarters was located. Until now, the company had only rented the building.

“We have made calculations and found that in the next 10 years, it would be more cost efficient for us to buy the asset instead of renting it,” he told reporters.

At present, the company acknowledged, the multifinance industry was facing challenges, such as banks being more selective in channeling funds to multifinance firms.

Many banks are requiring multifinance firms to have fixed assets as collateral. Thus, Pool Advista hopes the acquisition of its office building can support the company in obtaining more financing from banks.

Pool Advista is focusing on disbursing financing for productive sectors, such as investment financing, working capital financing, multipurpose financing and sharia-compliant financing.

As of July, Pool Advista’s total financing was equal to Rp 258.35 billion, comprising Rp 90.08 billion investment financing, Rp 85.14 billion working capital financing, Rp 82.91 billion multipurpose financing, and Rp 220 million sharia financing.

Pool Advista independent director Arfianto Wibowo believes prospects for the multifinance industry are still bright, considering the continuous increase in assets in the industry, which exceeded Rp 38 trillion as of June 2018, year-on-year.

He is confident that by focusing mainly on the productive sector and expanding collaboration with associations, the company will see growth amid tight competition in the market.

“We are collaborating with some property developer associations and have presented our products. Everything seemed to work well,” he said.

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