The Bangladesh Securities and Exchange Commission (BSEC) has decided to exempt Robi Axiata Limited, the country's second-largest telecom operator, from some clauses of Public Issue Rules for its initial public offering (IPO).
It has made the decision recently in response to an application submitted by the company. The securities regulator will also issue a notification in this regard.
Consequently, 136.1 million shares - which will be offered by Robi's employees under an Employee Stock Purchase Plan (ESPP) - will be considered as part of the IPO.
An ESPP is a company-run programme in which participating employees can purchase the company's stocks at a discounted price.
Robi will comply with the distribution of securities under the fixed price method to omit the employees' portion.
Earlier, Robi took an exemption from a directive of the Financial Reporting Council (FRC) which stated that it is mandatory for IPO issuers to issue shares against "share money deposit".
Robi sold shares to its employees with the condition that they will get allotment of shares only if the BSEC approves the company's IPO. Otherwise, the company will return the money to the employees.
The BSEC will impose a lock-in period on the employees' shares and specify other conditions at the time of IPO approval.
Earlier, Robi applied to the BSEC for raising Tk523 crore from the capital market through issuing new shares in an IPO.
The company will issue 523.8 million new shares at a face value of Tk10 each.
Of the new shares, 387.7 million will be offered to the public, which will represent 7.4% of the company's post-IPO number of shares.
Meanwhile, the employees will be offered to buy 136.1 million shares under an ESPP, which will represent 2.6% of the post-IPO number of shares.
The IPO proceeds will be utilised to fund Robi's capital expenditures and to enhance its profile as a leading telecom operator.
The company commenced operations in 1997 as Telekom Malaysia International (Bangladesh), under the brand name Aktel. In 2010, it was rebranded as Robi and the company changed its name to Robi Axiata Limited.
After its merger with Airtel Bangladesh in 2016, the company emerged as the second-largest telecom operator and retained the same name.
This merger helped the company make profits last year, after incurring losses for several years.
Malaysian telecom giant Axiata Group Berhad holds 68.69% of Robi Axiata's controlling shares. Other shareholders of the entity are Delhi-based Bharti Airtel and Tokyo-based NTT DOCOMO.
Currently, Robi's main competitor Grameenphone is the only telecom operator listed on the Bangladeshi stock market.