The much-awaited trading of Robi shares will begin from December 24, capping months of excitement in the bourse surrounding the mammoth initial public offering of the country’s second-largest mobile operator.
As is practice, Robi’s shares will be trading under the N category.
N-category companies are those that shall be transferred to other categories based on their first dividend declaration and respective compliance after listing of their shares.
Robi has offloaded 52.4 crore shares, which is about 10 per cent of its stakes, at Tk 10 each to raise Tk 523.8 crore, 98.5 per cent of which would be used for network expansion, especially 4G.
“Our focus will now turn to make sure we deliver the most innovative digital lifestyle solution to our customers while safeguarding the interest of our valued local and foreign shareholders,” said Shahed Alam, chief corporate and regulatory officer at Robi, in a press release on Monday.
Soon after the stock market regulator gave the nod to the listing on September 23, retail investors flocked to open beneficiary owner’s (BO) accounts, which is a must to buy shares, according to data from the Central Depository Bangladesh Ltd (CDBL).
Subsequently, there was tremendous frenzy among retail and institutional investors when its IPO subscription began on November 17.
The window closed on November 23, with applications exceeding the amount that Robi intends to raise by 5.74 times.
This suggests the pressure has amped up on the country’s second-largest mobile operator to improve its financial performance to satisfy the heightened shareholder expectations.
Last month, Robi posted a 77.2 per cent slump in profit between July and September from a year earlier. Its main competitor Grameenphone posted a 22.4 per cent profit growth for the quarter.
Robi’s third-quarter’s takings take its profit in the first nine months of 2020 to Tk 116.1 crore, up 1.9 per cent year-on-year.
“Although Robi has a decent top line, the numbers drop significantly when it comes to the bottom line due to inefficiency in managing expenses,” said a recent report of Brac-EPL.
Its asset turnover is half of Grameenphone’s without any trend in improvement in efficiency.
Its net property, plant and equipment (PPE)/site is Tk 84 lakh, which is more than double of Grameenphone’s net PPE/site of Tk 38 lakh.
“Therefore, it seems like Robi is inefficient in utilising its funds to construct sites for its subscribers,” the report said.
Robi has a much lower operating margin than that of Grameenphone due to the higher cost of revenue, maintenance and depreciation expenses.
Moreover, due to a high debt number, the interest and lease payments pull down the earnings as well, the report added.
At the end of November, the operator had 5.1 crore subscribers, which is 30 per cent of the market.
Robi Axiata is a joint venture between Axiata Group Berhad of Malaysia and Bharti Airtel of India. Axiata holds 68.7 per cent controlling stake in the entity, and Bharti holds the remaining 31.3 per cent share in the company.
The company commenced operations in 1997 as Telekom Malaysia International (Bangladesh) with the brand name ‘Aktel’. In 2010, it was rebranded as ‘Robi’ with the company changing its name to Robi Axiata.
Talks of Robi's listing have been going on since 2013. The government has requested the operator on several occasions to go public, but Robi did not entertain it on grounds of not logging in profits consistently.
It raked in Tk 240.2 crore in profit in 2015 after two years of losses. Two more years of losses followed.
In 2019, Robi's profit stood at Tk 16.9 crore, down 92.1 per cent from the previous year.