Investors have placed bids for Tk 2,226.4 crore of shares in Robi's initial public offering as the mobile phone operator looks to raise a record fund from the stock market.
The bids are 5.74 times the proceeds the second-largest carrier is hoping to receive from the eligible investors, general public and non-resident Bangladeshis.
This means the IPO is oversubscribed, which refers to an issue of securities where demand exceeds the available supply.
Robi has got an approval to raise Tk 523.79 crore through the IPO. It mobilised around Tk 136 crore from its employees, and the rest Tk 387.7 crore will be raised from the stock market.
The subscription is the third-highest in Bangladesh's stock market history, according to the Dhaka Stock Exchange.
Acme Laboratories topped the IPO subscription chart with bids for Tk 2,760 crore of its shares, followed by Mobil Jamuna's Tk 2,235 crore.
Robi's IPO size is the highest in Bangladesh's history, overtaking market leader Grameenphone's floatation of Tk 486 crore in 2009.
"The subscription of Robi proves that if a well-performing company enters the market, the market is ready to cater the funds," said Sharif Anwar Hossain, president of the DSE Brokers Association.
"It was expected to see such an oversubscription."
Investors believe that Robi will be able to perform better like GP, he said. The huge subscription, however, caused a shortage of liquidity in the secondary market.
Apart from the Robi IPO, some other IPOs have also hit the market in recent times impacting the secondary market, he said.
"If Robi can perform better than its present performance, the stock market will benefit," Hossain added.
The IPO proceeds will be used to expand the company's network in anticipation of revenue-generating opportunities in the areas such as Internet-of-Things.
"We are very encouraged to see the tremendous response from the local investors about our IPO process," said Shahed Alam, chief corporate and regulatory officer of Robi Axiata Ltd.
In the first nine months of 2020, Robi's revenue grew by about 1 per cent year-on-year to Tk 5,644 crore. Profits rose 1.9 per cent to Tk 116 crore, according to the company's financial report.
Robi has a subscriber base of 5.1 crore, which is 30 per cent of the total market. Of them, 3.47 crore use internet. Grameenphone has more than 7.76 crore active subscribers.
Robi was the first operator to roll out 3.5G services in Bangladesh. It introduced 4.5G services across all 64 districts in 2018.
On Thursday, Mahtab Uddin Ahmed, managing director and CEO of Robi Axiata, said Robi is going to be listed on the DSE although it is yet to get any extra incentives for going public.
"And unfortunately, our conditions have yet to be fulfilled either."
The operator demanded that the turnover tax be reduced to 0.75 per cent from the existing 2 per cent and the corporate tax be slashed by 10 percentage points to 35 per cent for the next 10 years.
"We are disappointed but hope to see some incentives for completing our listing with the stock market," Ahmed added.
Alam said: "Our shareholders had approved to proceed with the IPO process on the condition that the two preconditions we had placed are met."
"We earnestly urge the National Board of Revenue to address our preconditions not just to satisfy our foreign shareholders, but also the hundreds of thousands of local investors who are hoping to see the stock market roar back to life with the entry of Robi."
Its paid-up capital was Tk 4,714 crore and turnover Tk 7,481 crore in 2019, according to the draft prospectus.
The carrier started its journey in 1997 under the brand name of Aktel. It then changed its name to Axiata (Bangladesh) in 2009 and took the present name Robi Axiata in 2010.
Axiata holds a 68.69 per cent stake in the company and Delhi-based Bharti Airtel owns the remaining 31.31 per cent. In Bangladesh, Robi was the first operator to test 5G service on its network.