Robi is set to get listed on the twin bourses this year as the country's second largest operator looks to raise Tk 523.79 crore, in another stroke of good news for Bangladesh's ailing capital market that has been crying out for fundamentally strong, well-performing companies. Some 10 percent, or about 52.38 crore, shares will be offloaded, according to announcement made by Robi's parent company Axiata on Bursa Malaysia website yesterday. The face value of the shares will be Tk 10 and there will be no premium.
Of the shares, 38.78 crore will be offered to the public retail and institutional investors in Bangladesh, while the remaining 13.61 crore will be for employees and directors of Robi under the employee share purchase plan.
The funds raised will be used for network expansion in anticipation of revenue-generating opportunities in the areas of Internet-of-Things (IoT), home and enterprise, said Axiata, which holds 68.69 percent stakes in Robi.
Indian Bharti Airtel holds 25 percent stakes after it sold off its Bangladesh subsidiary to Robi and Japanese NTT Docomo the remaining 6.31 percent.
All three parties' holdings will be diluted according to the current ratio after the initial public offering, which will be managed by IDLC Investments. Robi will become the second mobile operator to get listed after Grameenphone, which started trading from November 16, 2009. Coincidentally, the two operators are locked in a bitter tussle with the telecom regulator over unpaid dues, the amounts of which are being hotly contested by Robi and Grameenphone. As per the telecom watchdog, Robi owes the state Tk 867.23 crore. Axiata has given Robi two conditions for proceeding with the IPO, according to senior executives of the operator versed in the board room discussions held in Kuala Lumpur on Thursday.
The first condition is thatRobi's corporate tax must be brought down by at least 10 percentage points. The operator pays 45 percent corporate tax at present.
Senior executives of Robi said in its board meeting the Axiata Group made the decision and announced it in Malaysian stock exchange yesterday. "We will seek to bring down the corporate tax to 30 to 35 percent, or else there will not be any benefit for the listed company," said Mohammed Shahedul Alam, chief corporate and regulatory officer at Robi.
Grameenphone got the corporate tax benefit when it got listed. But the government withdrew the benefit a few years ago.
The second condition is withdrawal of the 2 percent minimum income tax on overall revenue that the government imposed from this fiscal year, Alam said.
Robi representatives will meet the finance minister next month to drive home their demands, said another top executive of the company.
Talks of Robi's listing have been going on since 2013. The government too requested the operator on several occasions to make its debut on the stock exchange.
But Robi put it off on grounds of not logging in profits consistently.
It logged in profits in 2015 after two years of losses. The operator next saw profits in 2018, after two years straight years of losses.
In 2019, Robi logged in profits of Tk 16.9 crore, down 92.12 percent from the previous year, according to Axiata.
Murmurs of Robi's listing grew louder in January after it appointed IDLC Investments as the issue manager.
A few procedures are still left for the IPO -- which will be done as per the fixed price method -- to materialise.
Axiata must obtain its shareholders' approval at an extraordinary general meeting for the listing, and Robi has to get the approvals of: the Bangladesh Securities and Exchange Commission, the Bangladesh Telecommunication Regulatory Commission, Dhaka Stock Exchange and Chattogram Stock Exchange.
The carrier started its journey in 1997 under the brand name of Aktel, after being incorporated under the Bangladesh Companies Act, 1994 as a public company limited by shares on October 12, 1995 under the name of Telekom Malaysia International (Bangladesh).
On May 28, 2009, the name of the company was changed to Axiata (Bangladesh) and subsequently on 19 August 2010, the company assumed its present name, Robi Axiata.
At present, Robi's authorised share capital is Tk 6,000 crore and its paid-up capital is Tk 4,714 crore.
At the end of last year, Robi's active customer number stood at 4.90 crore, which is 29.60 percent of the market.