Singapore – Billionaire Prajogo Pangestu’s fortune is soaring once again, a sharp reversal from the precipitous falls that

erased billions over the past year.

The 81-year-old, who is Indonesia’s richest person, has added more than US$20 billion (S$25.7 billion) to his net worth since it hit a low in April, lifting it to US$36.2 billion, according to the Bloomberg Billionaires Index. 

The surge has mainly been driven by MSCI’s decision in July to remove restrictions on three companies linked to him – including PT Barito Renewables Energy, the geothermal firm that accounts for more than a third of his fortune. Starting in August, MSCI will include them in its index assessment again, after excluding them due to concerns about the high concentration of shares held by controlling shareholders. 

After MSCI’s announcement, shares of Barito Renewables jumped 20 per cent – sending Mr Pangestu’s fortune up US$3.5 billion, his biggest ever one-day gain. 

“MSCI’s reversal removed a major overhang,” said Mohit Mirpuri, senior partner at SGMC Capital. He noted trading volumes across Pangestu-linked stocks are now among the highest on Indonesia’s exchange.

The rebound highlights how the nation’s tightly held corporate structures can sharply amplify market moves and the subsequent effect it can have on individual fortunes. Indeed, in February Mr Pangestu saw US$5.4 billion wiped away, and last September he suffered an even bigger one-day loss of US$5.9 billion. Since 2023, he has been on a wild ride, swinging billions in either direction. 

At the centre of the frenzy is Barito Renewables, Indonesia’s top geothermal player, with more than 800 megawatts of capacity through its subsidiary Star Energy Geothermal. As Indonesia – one of the world’s top carbon emitters – pushes for net zero by 2060, the company’s role in the energy transition offers “long-term valuation support,” according to Herditya Wicaksana, technical analyst at MNC Sekuritas. 

Still, the stock’s rapid rise has raised concerns. It briefly landed on the Indonesia Stock Exchange’s watchlist in 2024 and crashed in September after index compiler FTSE Russell said it would exclude it from its indexes because of the high shareholder concentration, erasing nearly US$12 billion from Pangestu’s all-time high net worth of US$36.5 billion.

“We struggle to justify this quantum of increase in market value,” JPMorgan Chase & Co. analyst Arnanto Januri said in a July 24 note after the recent sector rally of Barito Renewables, PT Barito Pacific and petrochemical giant PT Chandra Asri Pacific. “We suspect the market is being optimistic in its assessment of growth opportunities.”

“It’s really, really insane,” Leonardo Lijuwardi, an analyst at NH Korindo Sekuritas Indonesia, said about Barito Renewables compared with other geothermal firms. He cited “conglomerate investing,” a retail trend that favours tycoons over fundamentals. “There’s a ‘Prajogo effect,’” he said. 

Mr Pangestu, son of a rubber trader, started Barito Pacific in 1979 to sell timber. The business has expanded to petrochemicals, power, property, plantation and forestry industries and now its core focus is power generation. 

Entities linked to him –  including Barito Pacific and Green Era, a Pangestu family office firm headed by daughter Nancy – own some 88 per cent of Barito Renewables. Externally, BlackRock is the biggest known shareholder with a 0.07 per cent stake, according to Bloomberg-compiled data.

Concentrated ownership is a familiar theme in Indonesia’s stock market. Dozens of low free-float companies have surged 1,000 per cent or more in recent years. One standout: DCI Indonesia, the nation’s biggest data centre operator, soared more than 120 per cent in July alone, triggering a trading suspension. Four people control nearly 80 per cent of the company. BLOOMBERG

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