In Indonesian media it was reported today that the Blue Bird Group, Indonesia's largest taxi services group, picked Credit Suisse AG and UBS AG as underwriters for its initial public offering (IPO), which is assumed to take place in the second or third quarter of this year (initially the IPO was planned for the first half of 2013). Through this IPO, in which 20 to 40 percent of its equity will be sold to the public, the taxi company targets to collect about US $250 million.
Blue Bird is clear market leader within Indonesia's taxi services market, in which dozens of private companies participate. To date, only one Indonesian taxi company has gone public on the Indonesia Stock Exchange - Express Transindo Utama -, which is Blue Bird's main competitor for market leadership. Of all Indonesian taxi companies, Blue Bird is known to be most reliable and therefore is usually the preferred choice for both Indonesians and foreigners when needing taxi transportation.
Despite the fact that a lack of public investments in Indonesia's infrastructure has caused chaotic conditions (traffic congestions) in some parts of the bigger Indonesian cities, Indonesia's taxi sector offers plenty of growth opportunities. The country contains a large population (240 million) that is becoming increasingly urbanized (more than half of the population currently lives in urban areas). Moreover, Indonesia shows strong macroeconomic growth, which gives rise to an expanding middle class (as GDP per capita is rising). Lastly, a lack of investments in public transportation makes taxis a more attractive alternative.