DIGIVESTASI - Nickel and coal trading company PT Sumber Mineral Global Abadi Tbk (SMGA) set an initial public offering (IPO) price of IDR 105 / share. In the prospectus of Bisnis Indonesia Daily, Wednesday edition (January 24, 2024), SMGA management set the highest IPO price at IDR 105 per share.

During the initial offering period, the offering price was Rp 100 to Rp 105, then set at Rp 105 per share. SMGA will issue 1.75 billion (1,750,000,000) shares with a nominal value of Rp20 per share. SMGA has the potential to raise IPO funds of Rp 183.75 billion. The IPO proceeds will be used as working capital to purchase coal and nickel in accordance with the company's business operations. SMGA also makes payments to nickel and coal suppliers. 

Sumber Global Mineral Abadi (SMGA) IPO Schedule. 
Effective date: January 23, 2024 
Public offering time: January 24-26, 2024 
Issuance date: January 26, 2024 
Air date: January 29, 2024 
Listing date on the Indonesia Stock Exchange: January 30, 2024

At the same time, SMGA will benefit from opportunities related to rising nickel demand, coupled with the huge electric vehicle (EV) trend. SMGA Senior Director Julius Edy Wibowo said the prospects for nickel going forward are still bright. This is supported by the findings of the International Energy Agency (IEA) which estimates that global nickel demand will continue to increase. 

According to him, nickel demand is expected to increase from 2,340 kilotons (KT) in 2020 to 6,250 KT in 2040. The increase in nickel demand is mainly due to the increasing demand for the electric vehicle and battery industry. "The global nickel industry demand is very large, not only in electric vehicle [EV] batteries but all types of batteries," Julius said in his statement, Friday (Jan/2024).

The Victoria Sekuritas team as underwriter assesses that SMGA offers attractive business prospects in line with the increasing demand for nickel, especially stainless steel. Currently, up to 65% of global nickel consumption is still used to produce stainless steel. SMGA is also a subsidiary of coal issuer PT Sumber Global Energy Tbk (SGER), which also has good prospects in the coal sector.

Julius said SMGA will use the IPO proceeds to fund the purchase of nickel and coal, as payment for the purchase of nickel and coal from suppliers to fulfill other multicomponent supply contracts together. He also believes the company's coal demand will remain strong in the future.

By 2025, the IEA estimates that Indonesia's coal consumption will grow by 4.7% per year, driven by the expansion of its coal-fired power plant fleet to 10 gigawatts (GW). Not only that, SMGA also has a limestone mining business. Limestone is a composite material that plays an important role in the nickel smelting industry, said Julius. Limestone is used to remove impurities or impurity substances in nickel ore. "With these positive sentiments, we believe SMGA's performance in the future will improve after the completion of the IPO," Julius concluded.