IPO Cash

IPO Cash

Avian raised Rp5.77 trillion of growth equity at its December 2021 listing, earmarking most of it for working capital and a new third factory. Three years on, the flagship factory was barely started, roughly Rp1.2 trillion of the proceeds still sat undeployed in government bonds and deposits, and the company had handed shareholders more cash than the entire net raise. The record reads as disciplined stewardship of a business that found less to reinvest in than the 2021 pitch implied — evidence that cuts both ways on the de-rating.

Sources: FY2022 Annual Report [1]; FY2024 Annual Report [2]; FY2025 Annual Report [3]; returns figure derived from reported dividends and buybacks FY2022–FY2025 [4].

What the money was raised for

The December 2021 IPO sold 6.2 billion new shares at Rp930 — about 10% of the enlarged company — for gross proceeds of Rp5.77 trillion, one of the larger listings on the Indonesia Stock Exchange that year [5]. After issue costs the company kept Rp5.65 trillion, and the prospectus committed all of it to three uses: about 70% (Rp3.93 trillion) for working capital, about 14% (Rp787 billion) for capital expenditure — including a new third manufacturing plant at Cirebon — and about 16% (Rp930 billion) to repay bank debt at the parent and its distribution arm [6].

The debt line is worth pausing on: a company that raised equity partly to become debt-free was, by construction, not capital-constrained. That framing matters for everything that follows.

The plan met a business that did not need it

By the end of 2024 — three years after listing — the annually filed use-of-proceeds report shows the debt repaid in full and working capital largely absorbed, but the expansion capex almost untouched. Of the parent's Rp702 billion capital-expenditure budget, only Rp77 billion had been spent, and roughly Rp1.19 trillion of the total proceeds still sat undeployed [7].

Source: FY2024 Annual Report, realisation of IPO proceeds; working capital and capex combine the parent and PT Tirtakencana Tatawarna [8].

The Cirebon plant is the concrete case. Avian bought the land — 110,000 square metres — back in 2018, earmarked IPO money for the build in 2021, then held off. Construction of the water-based paint facility only became a stated short-term priority in the FY2025 report, framed as a response to Sidoarjo and Serang running at high utilisation [9]. Two readings fit. One is discipline: management refused to sink capital into new lines until existing plants were full, rather than build a factory to justify the raise. The other is that the growth the IPO was sold on arrived slowly enough that Rp1.2 trillion earmarked for expansion had no home for three years. The industry chapter — where the 2021 market-growth forecast overshot what was delivered — favours the second without excluding the first.

The undeployed cash became an earnings engine

While the money waited, it was not idle in the accounting sense. Avian parked the proceeds in time deposits and Indonesian government bonds, and the finance income that threw off jumped from Rp81 billion in 2021 — before the cash landed — to Rp294 billion in 2022 [10]. It has drifted down every year since as the balance has been spent: Rp286 billion in 2023 [11], Rp285 billion in 2024, and Rp240 billion in 2025 [12].

Source: finance income per Note 28 (FY2021–FY2023) and the consolidated income statement (FY2024–FY2025) [13] [14].

This is the part that complicates the earnings picture. Finance income supplied about 17% of pre-tax profit in 2022 and roughly 11% in 2025 — a bond-like coupon sitting inside a paint company's P&L. Because it comes from the very cash the company is returning, every trillion rupiah paid out shrinks the coupon. Short-term investments alone fell to Rp2.57 trillion at end-2025, down 13% in a year [15]. Returning capital is shareholder-friendly, but here it also removes a slice of reported profit — part of why consensus models flat earnings into FY2026 despite a growing top line (Financials and Estimates).

The pivot to giving it back

With the factory deferred and the balance sheet already debt-free, management turned to distribution. Dividends have run between Rp1.1 trillion and Rp1.4 trillion every year since listing, and a buyback programme launched in December 2023 was extended in April 2025; by end-2025 Avian had repurchased 2.64 billion shares — 4.26% of the company — cutting the share count to 59.3 billion [16]. The two channels together returned about Rp6.37 trillion over FY2022–FY2025 — close to 99% of the Rp6.45 trillion earned in those years, and more than the entire Rp5.65 trillion net IPO raise.

Source: dividends and treasury-share purchases from the consolidated cash-flow statements, against profit for the year; FY2024 and FY2025 returns exceed earnings [17] [18].

The buyback deserves credit on execution. The Rp574 billion spent through end-2024 and roughly Rp645 billion more in 2025 bought stock at an average near Rp462 a share — about half the Rp930 IPO price, and near the trough of the de-rating [19] [20]. Retiring shares at roughly 11 times earnings in a business earning an 18% return on equity is accretive if the shares are genuinely cheap — the cheapness the valuation chapter weighs. The context to keep in view: the same controlling family that owns about 73% took a Rp2.35 trillion dividend in 2021, the year before the listing [21]. Whatever else the raise achieved, it did not fund the owners' cash-out; the pre-listing dividend did that. Since then, distributions have flowed to every shareholder on identical per-share terms — the alignment described in Ownership and Affiliates.

Acquisitions: a small toe-hold, not a spree

The one outbound investment of any size is telling for its restraint. In March 2025 Avian put Rp276 billion into a 16.67% stake in newly issued shares of PT Dextone Lemindo, a third-party adhesives maker, structured at arm's length [22]. It is a minority position, a fraction of the cash on hand, and adjacent to the core. For a company sitting on billions in liquid assets and a controlling family with a wide private business empire, the notable fact is what has not happened: no large, related-party acquisition that would move cash from the listed company toward family interests. The cash has gone back to owners pro rata rather than into empire-building.

The read

The capital-allocation record supports a specific, bounded judgment: Avian has been a careful steward of the IPO windfall, not a destroyer of it — but the way it has been stewarded confirms that the 2021 growth story was oversold. Debt was cleared, the earmarked factory was held until utilisation justified it, no value-destroying M&A appeared, and buybacks were done cheaply. Set against that, a business that returns 99% of its earnings, distributes more than it raised, and cannot deploy Rp1.2 trillion of expansion capital for three years is signalling that its high-return reinvestment opportunities are limited — the profile of a mature franchise, not a compounder in its growth phase.

The strongest fact against the sober reading is that the deferral may be prudence rather than scarcity: the Cirebon plant is now being built, and holding capital until existing lines fill is what a disciplined operator does. What would move the judgment is the deployment of that plant — whether the new water-based capacity is filled with incremental volume that lifts the growth rate, or simply absorbs share the company would have won anyway. If finance income keeps fading while the factory ramps into a still-soft market, the cash-return story hardens into the mature-franchise read; if the new capacity re-accelerates volume, the discipline interpretation earns the benefit of the doubt.