The Mitratel (MTEL) IPO is about to set a new record for capital raising this year.

 

Will it be able to compete against other tower behemoths like TOWR or TBIG?

 

Financial performances between these 3 major tower companies do not vary much in nominal figures. MTEL, however, has more opportunity for growth due to the IDR 20–25 trillion (USD 1.4–1.7 billion) cash it will secure through this IPO.

 

Digitalization in the country is necessary to the country economic success; while the opportunity for further Internet penetration is widely open.

 

Potential Beneficiaries

Proceedings from the capital raised will be used for:

• 56% (i.e. IDR 11-14 trillion) of the new capital for acquisition of existing towers, products and technologies.
• 44% (i.e. 9-11 trillion) of the new capital for enhancing their networks, build new towers, and technology expansions.

 

Indirectly, some companies that might benefit from this capital raising:

• BALI

With market capitalization of IDR 3 trillion and low P/S ratio, BALI could be ripe for acquisition. This follows the SUPR acquisition by TOWR recently.

 

• ERAA

ERAA has wide coverage of B2C distribution network and retails for communication equipment.

 

• MTDL

MTDL provides mainly B2B solution for customer digitalization (hardware, software, services). They also work with the global players such as SAP and Cisco.

 

 

 

Disclaimer: NOT FINANCIAL / INVESTMENT ADVICE. This article is of writer’s personal opinion. Any information contained here is for education and informational purpose only. Readers should seek other sources or professional advice for further clarification as necessary.