IFC commits $11m to Indonesian gas producer's IPO
The International Finance Corporation (IFC) has invested $11 million in Indonesia-based Aneka Gas Industri as part of the gas production company’s domestic IPO.
The investment secured IFC an almost 6% stake in the company, which has a market capitalization of about IDR3.4 trillion ($262 million). Aneka raised IDR800 billion in the IPO, short of its IDR989 billion target, and started trading in Jakarta on September 28.
According to a filing, IFC's contribution will be used to develop new gas production and distribution facilities across Indonesia as part of a broader $64 million expansion program. Aneka currently operates 44 gas plants and more than 80 filling stations, serving remote areas of Indonesia and employing some 2,500 people.
The company claims to have 30% market share in the domestic gas space, with a range of products servicing the agribusiness, consumer goods and heavy industrial sectors. It is believed to supply the local healthcare sector with 75% of its medical gasses and related equipment. Revenue improved 30% during 2015 to IDR1.4 trillion while profit declined 23% to IDR48 billion.
"Businesses supporting the consumer and SME [small to medium-sized enterprise] sectors are key drivers of job creation and growth for the economy, particularly in less-developed frontier regions," Azam Khan, IFC's country manager for Indonesia, said in a statement. "Companies serving the healthcare sector are another important focus for IFC, given the government of Indonesia's goal of universal health coverage for the population by 2019."
Healthcare has emerged as one of the more promising opportunities for venture investment in Indonesia as the sector benefits from relaxed foreign investment restrictions. It is estimated that as much as 90% of the country's medical raw materials must be imported. Recent efforts to reverse this dependency include a commitment by Navis Capital Partners to support the growth of medical equipment distributor Tawada Healthcare.
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