China’s Biggest Car Rental Firm Launches IPO

Chinese car-rental firm CAR Inc. aims to raise as much as US$468 million in an initial public offering launched today in Hong Kong.

The company, formerly known as China Auto Rental, is backed by Hertz Global Holdings and private equity firm Warburg Pincus. Shares will begin trading on the Hong Kong exchange on Sept. 19.

The company is offering as many as 426 million shares at a range of HK$7.50-HK$8.50. The company's revenue last year surged by two-thirds to 2.7 billion yuan (US$440 million).

CAR says it will use two-thirds of the proceeds from the IPO to approximately double its fleet to at least 100,000 vehicles.

The company's prospectus estimates China's rental-car industry's revenue will nearly double to 65 billion yuan ($10.6 billion) by 2018. About 60% of the current market involves rentals lasting more than 90 days. CAR expects short-term rentals to surge at an annual average rate of 27% through 2018 compared with 11% for long-term rentals.