Indonesian Parliament Urges Higher Free Float on the IDX
The Indonesia Stock Exchange (IDX) is currently considering a significant proposal to raise the minimum public float requirement for its listed companies to substantially strengthen market liquidity and attract broader investor participation in the country’s capital markets.
Lawmakers from Commission XI of the House of Representatives (DPR) have put forth a compelling proposal to increase the minimum free float from the existing 7.5–10 percent to a much higher target of at least 30 percent.
They cite Indonesia’s relatively low public shareholding when compared with other major ASEAN markets as the primary reason for this necessity.
Mukhamad Misbakhun, the DPR Commission XI Chairman, articulated this viewpoint, stating, “Indonesia has some of the lowest free float ratios. Increasing it above 30 percent will make the capital market more liquid.”
He emphasized that a higher public float would facilitate broader investor access, actively encourage more vigorous trading activity, and attract critical additional capital inflows into the market.
This proposed adjustment represents a structural reform designed to enhance the market’s overall depth and appeal.
The IDX is currently engaged in a comprehensive review of its listing regulations, which specifically includes an evaluation of the current free float requirements.
I Gede Nyoman Yetna, IDX Director of Corporate Assessment, confirmed this process, noting, “We are ensuring regulations remain relevant to market dynamics, benchmarking against global exchanges, and consulting stakeholders in the process,” with the exchange planning to publish a draft framework soon for public consultation and feedback.
IDX Strategies to Boost Liquidity and Capitalization
In addition to reviewing the potential increase in the minimum free float requirement, the IDX is actively promoting large-scale initial public offerings (IPOs) and rigorously monitoring existing listed companies to structurally enhance market capitalization and liquidity.
These large-scale offerings, dubbed “lighthouse IPOs,” are defined as offerings that must exceed a Rp 3 trillion (approximately $180 million) market value and include a minimum 15 percent free float, which equates to at least Rp 700 billion in publicly traded shares.
This strategy is designed to inject substantial liquidity and visibility into the market with each successful listing.
Five such lighthouse offerings—Raharja Energi Cepu (RATU), Bangun Kosambi Sukses (CBDK), Yupi Indo Jelly Gum (YUPI), Chandra Daya Investasi (CDIA), and Merdeka Gold Resources (EMAS)— have been successfully completed in 2025, providing a significant structural boost to liquidity.
Notably, EMAS’s Rp46.6 trillion ($2.9 billion) IPO makes it the 23rd company to go public in Indonesia this year, following 22 previous listings that collectively raised Rp10.4 trillion through early September, according to IDX data.
For existing listed companies, the exchange maintains vigilance by continuously monitoring free float levels, conducting regular outreach to advise issuers, and strictly enforcing its existing rules.
Companies failing to maintain a free float of less than 5% receive a special “X” notation and are placed on a monitoring board.
The IDX also actively advises issuers on strategic corporate actions capable of expanding publicly traded shares and improving overall trading quality.
Broader Regulatory Context and Market Performance
While the DPR suggests a 30 percent free float target, the Financial Services Authority (OJK) has put forward a more measured proposal, indicating a varied approach among regulators, even as overall trading data signals improving market depth and competitiveness.
The OJK, the main financial regulator, has proposed a more modest increase, suggesting raising the minimum free float requirement to 10 percent, according to OJK Capital Market Director Inarno Djajadi.
Free float, defined as the proportion of shares readily available for public trading, explicitly excludes significant holdings by major shareholders, controlling parties, commissioners, or company directors.
Regulators across the board agree that achieving a larger float is crucial for enhancing market depth and global competitiveness, which are essential prerequisites for successfully attracting more domestic and foreign investors.
Throughout 2024, trading data showed a definitive upward trend, signaling significant improvements in market liquidity.
The average daily transaction value reached a strong Rp 12.9 trillion, supported by a daily volume of 19.9 billion shares and a transaction frequency of 1.13 million.
As of September 26, 2025, the total market capitalization had impressively risen to Rp 14,888 trillion from Rp 13,475 trillion in September 2024, while the average daily transaction value climbed significantly to Rp 28.19 trillion, as detailed by IDX data, underscoring the market’s positive trajectory.
