Indonesia’s Avia Avian Pulls Off Asia’s Largest Paint IPO, Paints Promising Future

Indonesian paint giant Avia Avian listed on the Indonesia Stock Exchange on Wednesday, raising 5.7 trillion rupiah, or roughly $400 million. The IPO is the largest in Asia and the second-largest in the world for a paint producer, according to data from Dealogic.

Avia Avian’s IPO is also the fourth-largest listing in Indonesia after e-commerce platform Bukalapak in August this year (which raised 21.9 trillion rupiah), coal miner Adaro Energy in 2008 (12.2 trillion rupiah) and consumer product maker Indofood CBP Sukses Makmur in 2010 (6.2 trillion rupiah).

“This initial public offering of shares is an important milestone for Avian Brands employees, customers, suppliers, and all partners,” Wijono Tanoko, president director of Avia Avian, said in a statement. “Great support received for this IPO is the realization of the vision of Soetikno Tanoko who founded the Company in 1978.”

The company said that the IPO has attracted various investors, including global long-term investors, sovereign wealth funds and domestic institutions. The IPO was several times oversubscribed with a total bid of 10.9 trillion rupiah ($771 million). Despite the momentum, the company’s stock price was down almost 7% on the first day of trading.

After the IPO, the Tanoko family remains the majority shareholder with a 74.7% stake. Wijono Tanoko and his brother, Hermanto, who runs the company, debuted on the Indonesia Rich List last year with a combined net worth of $700 million.

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Going forward, the company is planning to have its products available in more cities across the archipelago. To support the expansion, the company is building its third factory in West Java’s port city of Cirebon that is slated to be operational in 2025.

Avia Avian is the largest company for waterproofing, wood and metal paint with more than 20% of the domestic market share in terms of sales last year, according to consulting firm Frost & Sullivan. The firm projects that the Indonesian decorative paint market will grow almost 10% in the next five years and reach a market size of 46 trillion rupiah, fueled by the growing middle class that will increase from 85 million last year to 165 million people in 2030 driving demand for housing that can lead to higher paint usage.

Despite a challenging time amid the pandemic, Avia Avian managed to record a revenue of 5.7 trillion rupiah last year, an increase of almost 2% compared to 5.6 trillion rupiah the previous year. While net profit reached 1.49 trillion rupiah last year, up 16% from 1.28 trillion rupiah the previous year.

This year, as the economy is recovering thanks to the easing of restrictions from the government, the company was able to post revenue of 2.7 trillion in the first five months, a 35% increase from the same period last year. Meanwhile, net profit in the period reached 751 billion rupiah, almost a 95% jump from 386 billion rupiah the same period the previous year, thanks to increased sales from architectural paints that has better profit margins.

“Our number one position in the decorative paint industry is a testament to the ability of local Indonesian companies to be able to develop domestically to be a market leader and provide unmatched quality products to meet the growing aspirations of the Indonesian people,” said Hermanto, president commissioner of Avia Avian.

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