An Initial Public Offering (“IPO”) is not merely a significant corporate milestone—it is a transformation. An IPO is not only a financial leap but also a test of a company’s internal readiness. At this stage, a company steps into the public spotlight to gain access to broader sources of capital while simultaneously building long-term credibility in the capital markets.
In Indonesia, enthusiasm for IPOs continues to grow. During the first half of 2025, companies raised IDR 70.1 trillion through initial public offerings—an increase of 100% compared to 2024. However, the IPO process often exposes weaknesses that may have been tolerated when a company was privately held but become significant liabilities under public scrutiny.
Below are six challenges that companies frequently underestimate when embarking on the IPO process:
1. Auditing Financial Statements for Multiple Years
Before listing on the stock exchange, companies are required to submit audited financial statements covering the previous three years, along with interim audited financial statements that are no older than six months. This requirement, established by the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX), often reveals issues such as inconsistencies in revenue recognition, improper asset classification, and adjustments to figures reported in prior years’ financial statements. If these issues are addressed only at the final stage, they can delay the IPO process and pose risks to the company’s credibility.
2. Misalignment Among Internal Stakeholders
Preparing for an IPO requires close coordination among the finance, legal, tax, and compliance functions. Without a clear plan and well-defined responsibilities, critical tasks can stall or be overlooked, particularly during busy periods such as year-end.
3. Gaps in Corporate Governance Structure
Public companies are required to maintain a structured governance framework, including independent commissioners, audit and nomination committees, and clear reporting lines. However, many privately held companies still operate informally and therefore fall short of public market standards. As a result, transitioning to a more structured governance model often requires not only procedural changes but also cultural adjustments at the leadership level.
4. Accuracy of the Prospectus and Supporting Documentation
An IPO prospectus is the official document that provides key information about a company before it goes public. It must present a comprehensive picture of the company’s operational, legal, and financial condition, including its shareholder structure, business licenses, financial projections, and third-party verifications. If documentation is incomplete or inconsistent, regulatory approval may be delayed, potentially undermining investor confidence.
5. Reporting Obligations Immediately After the IPO
Once listed, a company is required to publish its audited annual report no later than three months after the end of its financial year. In addition, it must submit quarterly or interim reports within 30 to 60 days, depending on the reporting period. These requirements are governed by IDX Regulation No. I-E and reinforced by OJK Regulation No. 29/POJK.04/2016.
Furthermore, under OJK Regulation No. 51 of 2017 concerning Sustainable Finance Implementation, public companies and financial institutions are required to prepare a sustainability report. This obligation applies regardless of company size. For companies that continue to rely heavily on manual systems, consistently meeting these deadlines can be particularly challenging.
6. An Organizational Culture That Must Adapt
An IPO introduces new dynamics, including higher levels of transparency, more structured decision-making processes, and greater accountability to external stakeholders. Companies must therefore adapt quickly to these new rhythms and expectations. Without clear internal communication, cultural resistance can become a significant obstacle to post-IPO performance.
