Indonesia’s MPM to boost auto rental exposure, preps IPO

MPM has INR500 billion ($51 million) on its books to finance an acquisition and Koji Shima, the company's president director, said it would target a car rental group "with a huge market share," the Jakarta Post reported.

Any acquisition would be conducted through MPM's subsidiary, MPM Rent, which has a fleet of 12,000 cars with 3,000 drivers. The subsidiary was purchased last year from Austindo Nusantara Jaya (ANJ) last year alongside an auto financing business.

The opening up of new business lines - a vehicle insurance unit is also under development - was part of the agreement that saw Affinity and Saratoga invest in MPM last year, according to a source familiar with the situation. The company was already the exclusive franchisee for Honda in east Java and had a motorcycle components and peripherals business as well.

"MPM had a fairly small financing unit but when the PE investors got involved they helped the company buy a business with a significant financing asset," the source said. "Financial services are becoming a key part of the overall business."

Shima sees similar potential in car rental, noting that the industry is served by fewer than 500,000 rental vehicles. MPM Rent's principal rival is TRAC-Astra Rent a Car, which has 27,000 vehicles and more than 3,900 corporate customers.

MPM is selling 970 million shares in its IPO and has priced the offering at the lower end of its INR1,500-2,000 indicative range. The IPO is being run by Morgan Stanley, Deutsche Bank, DBS Vickers and Indo Premier Securities.

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• Topics
• Exits
• Industrials
• Southeast Asia
• Expansion
• Indonesia
• Southeast Asia
• Saratoga Capital Group
• Affinity Equity Partners
• Exit
• IPO
• Growth capital
• Transportation