Robi IPO oversubscribed, sees third-highest retail demand
Investors have located bids for Tk 2,226.4 crore of shares in Robi's initial public offering as the mobile phone operator looks to improve a record fund from the currency markets.
The bids are 5.74 times the proceeds the second-largest carrier is wishing to get from the eligible investors, public and non-resident Bangladeshis.
This means the IPO is oversubscribed, which identifies an issue of securities where require 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 staff, and the rest Tk 387.7 crore will be brought up from the stock market.
The subscription may be the third-highest in Bangladesh's stock market history, in line with the Dhaka Stock Exchange.
Acme Laboratories topped the IPO registration chart with bids for Tk 2,760 crore of its shares, accompanied by Mobil Jamuna's Tk 2,235 crore.
Robi's IPO size is the highest found in Bangladesh's history, overtaking marketplace innovator Grameenphone's floatation of Tk 486 crore in 2009 2009.
"The subscription of Robi proves that if a well-performing organization enters the market, the market is preparing to cater the cash," said Sharif Anwar Hossain, president of the DSE Brokers Association.
"It was likely to see such an oversubscription."
Investors assume that Robi will be able to perform better like GP, he said. The large subscription, however, induced a shortage of liquidity in the secondary industry.
In addition to the Robi IPO, some other IPOs have as well hit the market recently impacting the secondary market, he said.
"If Robi is capable of doing much better than its present performance, the currency markets will profit," 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 extremely encouraged to start to see the tremendous response from the neighborhood investors about our IPO process," stated Shahed Alam, chief corporate and regulatory officer of Robi Axiata Ltd.
In the primary nine months of 2020, Robi's earnings grew by about 1 % year-on-year to Tk 5,644 crore. Profits rose 1.9 per cent to Tk 116 crore, in line with the company's financial report.
Robi includes a subscriber basic of 5.1 crore, which is 30 % of the total market. Of them, 3.47 crore use net. Grameenphone has a lot more than 7.76 crore active subscribers.
Robi was the initial operator to roll out 3.5G services on 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 will be listed on the DSE though it is yet to get any extra incentives for going people.
"And unfortunately, our types of conditions have yet to end up being fulfilled either."
The operator demanded that the turnover tax be reduced to 0.75 per cent from the prevailing 2 % and the organization tax be slashed by 10 percentage details to 35 % for another 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 procedure on the problem that both preconditions we had put are met."
"We earnestly urge the National Table of Revenue to handle our preconditions not merely to fulfill our foreign shareholders, but also the hundreds of thousands of local buyers who are hoping to start to see the stock market roar back again to life with the access of Robi."
Its paid-up capital was Tk 4,714 crore and turnover Tk 7,481 crore in 2019, in line with the draft prospectus.
The carrier started its journey in 1997 beneath the brand of Aktel. After that it changed its name to Axiata (Bangladesh) in 2009 2009 and took the present name Robi Axiata this year 2010.
Axiata holds a 68.69 % stake in the business and Delhi-based Bharti Airtel owns the remaining 31.31 %. In Bangladesh, Robi was the primary operator to test 5G provider on its network.
