15
their
shares
to
the
general
public
for
the
very
first
time,
which
then
will
be
listed in the stock exchange in hope that it will achieve a liquid market.
When a company decided to go public, it needs to write a report called
prospectus.
Prospectus
information
is written
information
in relation
with
the
public
offering
in
order
to
provide
valuable
and
complete
information
as
well
as
attract
potential
investors
to
buy
the
shares.
It
contains
both
financial
and
non-financial
information
in regards for the company going public.
2.1.2
Process of Conducting an Initial Public Offering in Indonesia
When
a
company
decided
to
be
publicly
listed,
the
company
needs
to
follow
the
requirement
at Badan
Pengawas
Modal
dan
Lembaga
Keuangan
(BAPEPAM-LK). BAPEPAM-LK is
an
institution under
the
Indonesian
Ministry
of Finance
which
will
serve to develop,
direct
and
oversee
the
capital
market
daily
activities,
convey
and
implement
policies
and
standards
in the
financial industry (Indonesia Stock Exchange, 2010). Indonesian Stock
Exchange
has
listed
requirements
and
criteria
that
need
to be fulfilled
by
the
companies who want to be listed publicly.
2.1.2.1 Listing Requirements
When
a
company has
decided
to
go
public,
it
needs
to
appoint
one
or
more
underwriters
to help
the
company
to prepare
all
needed
requirements to
conduct
the
public
offering.
The
Indonesian
Stock
Exchange has listed the requirements
and categorized
it in four steps.
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