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View all search resultsThe IPO question: Fostering competition through regulatory reforms
Indonesia needs coordinated systematic reform to transform its capital markets from a collection of well-intentioned programs into an ecosystem that can facilitate enterprises’ journey from early stage ventures into sustainable public companies.
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A woman uses a smartphone at the Indonesia Stock Exchange (IDX) in South Jakarta to watch President Prabowo Subianto’s State of the Nation Address on Aug. 15, 2025. (Antara/Asprilla Dwi Adha)
I
ndonesia stands at a critical crossroads for growth. As one of the world’s fastest-growing digital economies driven by a young population, it is also home to Southeast Asia’s largest micro, small and medium enterprises (MSMEs) base. This entrepreneurial energy is vast, yet undercapitalized.
Indonesia’s venture capital (VC) market remains relatively small compared to its potential, and compounding this issue further, what little funding exists is heavily concentrated in Jakarta. This leaves regional MSMEs underserved and more challenging to scale.
This is where public markets can step in to close the gap. The Indonesia Stock Exchange (IDX), through its development and acceleration boards, is uniquely positioned to provide a catalyst pathway for growth companies. Lessons from India’s NSE EMERGE and China’s Beijing Stock Exchange (BSE) show how strategic reforms can help create vibrant, inclusive listings ecosystems.
Indonesia has already taken important steps. The ambitious 2024-2028 road map of the Financial Services Authority (OJK) envisions a thriving venture capital industry empowering MSMEs and driving national economic growth.
Recent enforcement actions (July 9, 2025, Tempo.co) demonstrate commitment to maintaining standards. Simultaneously, the 0.18 percent growth in VC financing across productive sectors in early 2025 signals nascent momentum in the real economy (July 15, 2025, Bisnis.com)
The Acceleration Board currently caters to companies with assets below Rp 250 billion (US$15 million), which, with the Development Board, will create pathways for smaller enterprises. The IDX Incubator program has also yielded 228 MSMEs listings, with 44 joining the Acceleration Board in May alone.
However, broader concerning trends persist. Initial public offering (IPO) volumes in Indonesia declined 44 percent in the first half of the year (TNGlobal), with average deal sizes increasing, suggesting that only larger companies are accessing public capital. The very companies Indonesia needs to drive its next wave of growth remain undercapitalized.
