A Study on Initial Public Offering for Financing Business Growth of PT Armindo Catur Pratama

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Elisa, Anastasia and Nurdiansyah, Artha and Tiongson, Lester Macalinao (2011) A Study on Initial Public Offering for Financing Business Growth of PT Armindo Catur Pratama. Project Report. Sekolah Tinggi Manajemen IPMI, Jakarta Selatan. (Unpublished)

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Abstract

This report was commissioned to examine whether it is in the best interest of PT. Amindo Catur Pratama (ACP) to implement an Initial Public Offering (IPO). As a framework for our method of analysis, we have implemented recarching and gathering of information about the industry and its opportunities and threats and also the company core capabilities and historical performance, accompanied with future projects about the company's financial position for the next five years. ACP's sales volume in Indonesia is projected to experience growth from new infrastructure projects in both public and private sectors to government initiatives and economic growth respectively. The projected sales growth will be used in our analysis as the primary factor to determine whether ACP will require further financing and whether the IPO is suitable to be their financing option. In our investment valuation analysis, we concluded that for the next 5 years, ACP could generate cash from stock issuance of IDR 400 billion with 10% sales growth cach year, IDR 600 billion with 20% sales growth cach and IDR 800 billion with 30% sales growth cach year. The scenario that requires financing is at the 20% and 30% sales growth projections for IDR 200 billion and 500 billion respectively but it can only be achieved even though new product sales or diversification instead of recurring business. If ACP will continue to operate to produce existing products, it will not need financing as it can be supported by the company's growth itself If ACP only required cash to support the growth of 20% & 30. financing through bank loans would provide better options since it will generate higher ROE over ROA If ACP needs more cash to support other investment opportunities hence IPO will provide better options but the additional cash should generate 2.5 times of sales on the equity to maintain the current ROE level. Additional consideration for ACP to go for IPO as an option, is that the company needs to prepare its organizational structure and financial reporting system to maximize the potential advantages of the IPO.

Item Type:	Monograph (Project Report)
Subjects:	H Social Sciences > HA Statistics H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Library > GFP (Group Field Project)
Depositing User:	Melinda Lusyyana
Date Deposited:	23 Jan 2020 08:50
Last Modified:	22 Nov 2021 04:02
URI:	http://repository.ipmi.ac.id/id/eprint/584

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