‘Robi’s listing will be a gift for investors’

Robi plans to submit its application for listing in the country's twin bourses to the Bangladesh Securities and Exchange Commission in the middle of next month, as the long-awaited debut of the second largest mobile phone operator is finally taking shape.

The operator, which got the approval from the Bangladesh Telecommunication Regulatory Commission last week for the initial public offering, though will make its debut on both the Dhaka and Chattogram stock exchanges in the second half of the year.

The reason being, its parent company Axiata, which has 68.69 per cent stakes, has put up two conditions for the listing and the operator is lobbying with the government for them.

"On February 20, our shareholders gave the green light to be listed in the market but at the same time they also asked us to ensure some policy support that will help to flourish business," said Mahtab Uddin Ahmed, chief executive officer of Robi, at a press conference yesterday at their headquarters in the capital.

The first condition is Robi's corporate tax must be brought down by at least 10 percentage points. At present, the operator pays 45 per cent corporate tax.

Grameenphone got the corporate tax benefit when it got listed. But the government withdrew the facility a few years ago.

The second condition is withdrawal of the 2 per cent minimum income tax on overall revenue that the government imposed from this fiscal year. The operator wants the rate to be 0.75 per cent.

Whether the government agrees to the conditions or not would be reflected in the national budget for fiscal 2020-21.

"Robi's listing will help Bangladesh's twin bourses to become stronger -- this will be a gift for the country's stock market investors," Ahmed said.

The operator intends to offload 10 per cent, or about 52.38 crore, shares to raise Tk 523.79 crore for network expansion in preparation for 5G.

Of the shares, 38.78 crore will be offered to the public and institutional investors in Bangladesh, while the remaining 13.61 crore will be set aside for employees and directors of Robi under the employee share purchase plan.

The face value of the shares would be Tk 10 and there will be no premium.

Talks of Robi's listing have been going on since 2013. The government has requested the operator on several occasions to make its debut on the stock exchange.

The operator actually ceded to the government's requests in 2014 and was taking plans for the IPO. But, it led to nowhere as the government did not provide favourable policies then, Ahmed said.

Ahmed hopes the pattern does not repeat again as the move to get listed comes this time following requests from the government.

"Considering the country's benefit, we have placed the issue to our shareholders and they have taken it very positively. Our policymakers now need to make it happen."

Robi will become the second mobile operator to get listed after Grameenphone, which started trading from November 16, 2009.

The operator, which is 25 per cent-owned by Indian Bharti Airtel and 6.31 per cent by Japanese NTT Docomo, has planned to invest $500 million in Bangladesh. But the three stakeholders have put off the investment plan for regulatory restrictions.

"Our shareholders still have concerns about the regulatory issues and if policymakers can remove the unexpected elements from the market, it will be more mature," Ahmed said.

Meanwhile, at yesterday's event Robi disclosed its financial results for 2019.

In 2019, Robi logged in profits of Tk 16.9 crore, down 92.12 per cent from the previous year, despite seeing double-digit revenue growth to Tk 7,481 crore.

At the end of last year, Robi's active customer number stood at 4.90 crore, which is 29.60 per cent of the market.

"We are in a very good momentum and if we get some support from the policymakers it will help us get optimum benefit from the market," Ahmed added.

Stock market stakeholders though are looking forward to welcoming Robi.

"These are the type of companies stock investors have been demanding in the last few years," said Md Sayadur Rahman, president of the Bangladesh Merchant Bankers Association.

Robi's listing will increase the depth of the country's stock market because it will enhance market capitalisation, he said, adding that it will also attract new local and foreign investors.

Subsequently, the government should give Robi tax incentives to encourage other companies of its ilk to come to the stock market.

Stock market's trade will increase by the presence of well-performing companies like this, which, in turn, will boost the government's tax revenue, said Rahman, also the managing Director of EBL Securities.

If Robi comes to the stock market it will be a good boost for the market, said Khairul Bashar Abu Taher Mohammed, former secretary general of the BMBA.

However, their two conditions can pose to be a roadblock.

If the government can consider it for all the listed telecom companies then it would be good for the market, said Bashar, also the chief executive officer of MTB Capital.

"Robi's incurring losses in 2016 and 2017 might be a concern for stock investors though," he added.

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.