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IPO-linked debt-to-equity falls for Indonesian non-financial firms

Business, Management and Accounting research
Photo by Cht Gsml on Unsplash · Unsplash License

What the study found

Non-financial companies on the Indonesia Stock Exchange generally showed a lower net debt-to-equity ratio (Net DER, a measure of debt relative to equity) after an initial public offering (IPO). The study found a significant decrease in average Net DER, while the median stayed around 0.3.

Why the authors say this matters

The authors say post-IPO capital structure is not enough to guarantee better financial performance, and that evaluating financial performance after an IPO is a focus for managers and investors. The study suggests that changes in capital structure after an IPO are relevant to that evaluation.

What the researchers tested

The researchers analyzed capital structure changes before and after IPOs for 74 non-financial companies that went public on the Indonesia Stock Exchange from 2003 to 2012. They used t-test analysis and descriptive statistics to examine Net DER at both the overall market level and for individual industries.

What worked and what didn't

For the overall market, the average Net DER decreased significantly after IPO. At the same time, the median Net DER remained around 0.3, which the authors say showed companies used additional debt capacity to return to their pre-IPO level.

What to keep in mind

The abstract does not describe limitations beyond the focus on non-financial firms listed on the Indonesia Stock Exchange and the 2003–2012 IPO period. It also does not provide detailed industry-by-industry results in the available summary.

Key points

  • The study examined 74 non-financial companies that listed on the Indonesia Stock Exchange from 2003 to 2012.
  • Net debt-to-equity ratio (Net DER) is the capital structure measure used in the study.
  • Average Net DER fell significantly after IPO across the overall market.
  • The median Net DER stayed around 0.3 after IPO.
  • The authors say post-IPO capital structure alone does not ensure better financial performance.

Disclosure

Research title:
IPO-linked debt-to-equity falls for Indonesian non-financial firms
Authors:
Sasha Dhita, Noer Azam Achsani, Roy Sembel, Sugeng Purwanto
Publication date:
2026-04-24
DOI:
10.14419/ijet.v7i3.25.17743
OpenAlex record:
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Image credit:
Photo by Cht Gsml on Unsplash · Unsplash License
AI provenance: This post was generated by OpenAI. The original authors did not write or review this post.

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