Indonesia raises the bar: IDX tightens its free float rules

The Indonesian Stock Exchange has overhauled its listing framework through a set of changes that reshapes how companies prepare for IPOs and how existing listed companies manage their shareholder base. The areas of greatest practical impact are the new free float definition, the exclusion of pre-IPO shareholders from the initial free float calculation, the shift to market capitalisation-based thresholds, higher ongoing free float requirements, and the formalisation of controller lock-ups.

On 31 March 2026, the IDX issued IDX Regulation No. I-A and an accompanying Circular Letter, introducing tighter free float thresholds, a refined free float definition, and formalised lock-up requirements for controllers. The changes came into force immediately, with transitional arrangements for certain existing listed companies.

The amendments touch virtually every stage of the listed company lifecycle. For IPO candidates, the rules set higher free float thresholds, redefine who counts as free float shareholders, and formalise lock-up restrictions for controllers. For existing listed companies, higher ongoing thresholds and compressed transition windows mean that compliance planning cannot be deferred. 

A stricter definition of free float

Free float shares are now defined as scripless shares listed on the IDX that are: owned by shareholders each holding less than 5% of total listed shares; not owned by any controllers or their affiliates; not owned by members of the board of directors or board of commissioners; not treasury shares; and not subject to transfer restrictions. The most technically significant change is the addition of a fifth criterion to the free float share definition. The Circular Letter confirms that this exclusion captures shares currently under lock-up or transfer restrictions, shares held by venture capital or private equity firms as part of their portfolios, and shares subject to seizure or blocking orders by law enforcement authorities or other competent authorities. 

The practical consequence for VC and PE investors in Indonesian listed companies is significant: their holdings may no longer count as free float. Further IDX guidance will be needed, and the existing mechanism allowing listed companies to apply for specific shareholders holding less than 10% of the total listed shares for public investors to be categorised as free float shareholders may become a more important tool in practice.

IPO structuring: the pre-IPO shareholder question

Under the new rules, only shares offered in the IPO itself can satisfy the initial listing free float threshold. Under the previous regime, the IDX in practice generally permitted listing applicants to include minority pre-IPO shareholdings meeting the free float criteria in satisfying the initial requirement. That is no longer allowed although pre-IPO shareholders may still be counted towards the ongoing free float obligation from the listing date onwards.

This is a  structural change that will directly affect IPO planning. Companies that previously relied on existing minority shareholders to supplement their initial free float will need to revisit their offering size and structure.

Market cap-based thresholds and higher ongoing requirements

The IDX has moved from an equity-based to a market capitalisation-based approach for determining minimum free float thresholds at initial listing. The new requirements are as follows: 

In addition, listing applicants must satisfy minimum free float share numbers of 300 million shares for the Main Board and 150 million shares for the Development Board. The IDX is also authorised to determine a different minimum number of free float shares for IPOs raising at least IDR 30 trillion. 

For ongoing compliance, all listed companies must maintain a minimum of 50 million free float shares representing at least 15% of total listed shares, with at least 300 shareholders with single investor identification (SID). Companies on the IDX Main Board face additional requirements: a free float market capitalisation exceeding IDR 200 billion and at least 750 shareholders with SID. For IPOs raising at least IDR 30 trillion where the IDX has approved a different minimum number of free float shares at the time of listing, the ongoing free float requirement may follow such approved number. 

Existing listed companies have until 31 March 2027 or 31 March 2028 (for larger-cap companies, depending on their current free float level) and until 31 March 2029 (for smaller-cap companies) to comply with the new requirements. For newly listed companies, the ongoing free float requirements apply only after one year from their listing date, during which the initial listing free float requirements must be maintained. 

Controller lock-ups formalised

Controllers must maintain control and/or accept transfer restrictions on their shareholding for a minimum of 12 months from the listing date, or such other period determined by the IDX. These obligations extend to incoming controllers where a post-listing change of control is disclosed in the IPO prospectus. Where the direct controller holds above 50%, it may transfer shares during the lock-up period so long as its stake remains above that threshold. However, controllers holding 50% or less are prohibited from transferring any shares during the lock-up period.

Our view

These amendments represent a meaningful tightening of IDX listing standards. The shift to market capitalisation-based thresholds reduces IPO structuring flexibility, while the exclusion of pre-IPO shareholders from the initial free float calculation places real pressure on offering size. The formalisation of controller lock-ups, including their extension to incoming controllers, will require more deliberate planning where a post-IPO change of control is contemplated. For existing listed companies, the transition clock to comply with the higher free float requirements is already running.

Please reach out to one of the authors or your usual contact to discuss how these changes may affect your organisation or your IPO and listing plans.