The IHSG Doesn't Weight Every Share Equally. Free Float Is Why
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5 min read
Two companies can be worth roughly the same on the Indonesia Stock Exchange (BEI) and still count for very different amounts inside the IHSG (Indeks Harga Saham Gabungan, Indonesia's main stock index). The reason is free float: the share of a company's stock that is actually available for the public to buy and sell. The IHSG does not weigh a stock by its full market value. It weighs it by free float only, and that single rule can cut a giant company's real index weight by 80% or more.
Free float sounds technical, but the idea is simple. Every listed company has some shares that rarely, if ever, trade: the founder's own stake, a parent company's holding, shares locked up by a controlling family. Those shares exist, but they are not really "in the market."
Under IDX's own current rule (Exchange Regulation No. I-A, effective 31 March 2026), free float shares are specifically defined as scripless shares owned by shareholders who each hold less than 5% of the company's total listed shares, and not owned by the company's controllers, their affiliates, or its board members (HSF Kramer, "Indonesia raises the bar: IDX tightens its free float rules," July 2026; Tempo, "IDX Officially Implements 15% Free Float Requirement"). A controlling shareholder's stake, no matter how large, simply does not count.
This is not just a listing requirement. It is also how the IHSG itself calculates each stock's weight. Through a phased rollout that started on 1 October 2021 (30% of the free-float adjustment), moved to 60% in January 2022, and reached 100% by April 2022, the IHSG now weights every constituent by free-float-adjusted market capitalisation, not raw market capitalisation (Bisnis.com, "BEI Segera Terapkan Metode Free Float dalam Penghitungan Indeks, Berikut Jadwalnya," 2 June 2021).
A company with a Rp400 trillion market cap and a 10% free float carries the same index weight as a company worth Rp40 trillion with a 100% free float. Size on paper and size inside the index are two different numbers.
Take PT Barito Renewables Energy Tbk (BREN), one of the largest companies on the IDX by raw market cap: about Rp432 trillion as of 13 July 2026 (Kontan). Its free float, per BEI's own compliance data, was just 12.3% as of 31 March 2026 (Kontan, "Lebih Dari 400 Saham Di BEI Belum Penuhi Free Float 15%," 8 May 2026).
Run those two figures through the formula above and BREN's free-float-adjusted market cap comes out to roughly Rp53 trillion, about 88% less than its raw Rp432 trillion headline figure (self-derived from the two sourced figures above).
Compare that with PT DCI Indonesia Tbk (DCII), which sat close behind BREN at about Rp475 trillion in raw market cap the same week, but already had an 18.5% free float as of the same March 2026 snapshot, above the regulatory minimum. DCII's free-float-adjusted market cap works out to roughly Rp88 trillion, still a steep cut from its raw size, but a smaller one than BREN's.
Free float is not only about index weight. It is also a listing requirement, and IDX just made it stricter. Under the same Exchange Regulation No. I-A, effective 31 March 2026, the minimum free float a company needs to stay listed rose from 7.5% to 15% of its total shares.
The change affects more companies than you might expect. As of BEI's own 31 March 2026 data, more than 400 listed companies had not yet reached the new 15% threshold, including BREN (12.3%), Bank Syariah Indonesia (BRIS, 9.3%), HM Sampoerna (HMSP, 7.5%) and Pantai Indah Kapuk Dua (PANI, 11%) (Kontan, 8 May 2026).
Companies below the threshold get a phased deadline, not an instant one: those with a market cap of at least Rp5 trillion must reach at least 12.5% free float by 31 March 2027 and 15% by 31 March 2028. Companies with a market cap below Rp5 trillion get an extended deadline of 31 March 2029 (same source).
If you hold an IHSG-tracking index fund, or you are comparing two companies by "how big" they look, free float is the number that actually decides how much either one moves the index you are watching. A giant company with a small free float, like BREN today, can dominate headlines about market capitalisation while carrying a much smaller real weight inside the IHSG than its size suggests. This compounds with the concentration the index already has at the top: see how a handful of names carry most of the IHSG's weight in the first place for the fuller picture.
Free float explains why a stock's size on paper and its pull on the IHSG can diverge. Open the Market page in NetWort to see which stocks and sectors are actually driving the index's moves today, rather than assuming raw market cap tells the whole story. Bank Central Asia (BBCA), the exchange's single largest company by market cap, is a useful one to start with, since its own weight inside the IHSG runs through this same free-float math.