Robi, the second largest mobile operator in the country, has sought tax break and exemption of lock-in period from the stocks regulator before it offloads its 10% stake in the capital market.
The mobile phone carrier will offload over 38.77 crore ordinary shares at an offer price of Tk10 each.
On Sunday, Robi Axiata Limited Chief Executive Officer Mahtab Uddin Ahmed sent a letter to Bangladesh Securities and Exchange Commission (BSEC) Chairman M Khairul Hossain, seeking the fiscal and regulatory exemption.
According to the application, the company wants corporate tax to be slashed by 10 percentage points for ten years after its listing.
Currently, corporation tax for publicly traded mobile companies is 40%; while it is 45% for non-publicly traded mobile network operators.
Robi also sought withdrawal of the 2% minimum income tax on overall revenue the government imposed in the current fiscal year on telecom companies.
Of the total shares, 13.61 crore will be issued to the eligible directors and employees of Robi under the employee share purchase plan (ESPP).
Robi urged the BSEC to treat the issuance in ESPP as public holding shares so that the existing three-year lock-in provision is not applicable to them.
Currently, as per public issue rules, sponsors and directors of a newly listed company cannot sell their stake in the first three years from the first trading day.
Robi CEO Mahtab Uddin Ahmed said in the letter: “We believe that the listing of Robi in the Stock Exchanges will accelerate your (BSEC chairman) endeavor to make the capital market more vibrant and stable. This will certainly be a key milestone in the capital market history of Bangladesh.”
BSEC spokesperson Md Saifur Rahman told Dhaka Tribune, the commission would scrutinize the proposals of Robi.
On Monday, Robi submitted their IPO prospectus to the BSEC for approval. The main objective of the IPO is to expand its existing network coverage.
As per the latest financial statement ending on December 31, 2019, earning per share (EPS) of the company was Tk0.04, while the net assets value per share was Tk12.64.
Last year, the company’s net profit was Tk16.90 crore , which was Tk214.7 crore in the previous year.
The revenue of the company also witnessed a growth of 10% last year to Tk7,481 crore because of the increased data revenue growth of 28%.
Rising of the minimum tax rate from 0.75% to 2%, doubling of SIM tax to Tk200, raising of supplementary duty on smartphones from 10% to 25%, raising of supplementary duty on mobile usage from 5% to 10% had a major impact on the profitability on Robi, despite spike in their revenue income.
Robi has appointed IDLC Investments Ltd as the issue manager for the IPO process.
The telecom operator’s subscriber base currently stands at 46.9 million, representing 29.9% of the subscriber market share. The Malaysia-based Axiata owns a 68.9% stake in the mobile network operator.