Robi Axiata Ltd, the second-largest telecom operator of the country, will raise Tk523 crore from Bangladesh's capital market through issuing new shares in an initial public offering (IPO), its parent company Axiata said in a stock exchange filing in Malaysia.
Robi will issue 52.38 crore new shares at a face value of Tk10 each. Among the new shares, 38.77 crore shares will be offered to the public in the IPO, which will represent 7.4 percent of the company's post IPO number of shares.
On the other hand, its employees and directors will be offered to buy 13.61 crore shares under an employee stock purchase plan (ESPP), which will represent 2.6 percent of the post IPO number of shares.
Axiata said in its disclosure on Friday that the IPO proceeds will be utilised to fund Robi's capital expenditures and enhance its profile as a leading telecom operator.
They are expecting that the process for listing in the Dhaka Stock Exchange and the Chittagong Stock Exchange will be accomplished within 2020.
Local sources confirmed that the company will file the IPO application with its prospectus, based on audited financial statement for the fiscal year that ended on December 31, 2019. The filing is likely to take place within this month.
According to the Axiata statement, Robi's net revenue increased 12 percent to reach nearly Tk7,500 crore in 2019. Over the year, Robi's subscriber base has grown up to 4.9 crore customers – nearly a third of the market share.
Sources confirmed that despite a quarterly loss of nearly Tk25 crore in January-March last year, Robi made a net profit after tax of Tk114 crore in first three quarters from January to September.
At the end of December, the net asset value of the company was around Tk6,000 crore.
Gross debt of the company stands at 90 percent of equity when IFRS 16 – part of the modern accounting rules – is complied with. The ratio is 30 percent based on Pre-IFRS 16 accounts.
After the planned IPO with 10 percent shares floated, Robi's paid-up capital will cross Tk5,000 crore, and it will be the largest company at the local bourses in terms of paid-up capital.
The company commenced operations in 1997 as the Telekom Malaysia International (Bangladesh), with the brand name Aktel. In 2010, it was rebranded as Robi and the company changed its name to Robi Axiata Ltd.
After the merger with Airtel Bangladesh in 2016, the company emerged as the second largest telecom operator and retained the same name. The merger helped the company to see profits in the last year.
Robi Axiata's controlling 68.69 percent shares are held by Malaysian telecom giant Axiata Group Berhad. Other shareholders in the entity are Delhi based Bharti Airtel and Tokyo based NTT DOCOMO Inc.
Right now, Robi's main competitor Grameenphone Ltd is the only telecom operator listed in local stock exchanges.
The IDLC Investments Ltd, a top local merchant bank, is the issue manager of Robi.