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Robi Axiata, the Bangladeshi unit of Malaysia’s largest telecommunications company by revenue, raised 5.24 billion taka ($ 62 million) from the initial sale of shares.
Robi, a business between Malaysian group Axiata and India’s Bharti Airtel, has sold around 524 million, or 10 percent of the business.
The funds will help Robi grow his network in a country that the Asian Development Bank predicts will grow 6.8 percent, the fastest in the region, for the current fiscal year.
Robi also borrowed $ 95 million from the International Finance Corporation (IFC) for the extension of the network.
Robi posted a 77.2% drop in profits between July and September compared to the previous year. Its main competitor, Grameenphone, reported profit growth of 22.4% for the quarter.
Robi’s third quarter revenue brings his profit in the first nine months of 2020 to Tk 116.1 crore, up 1.9% year over year.
“Although Robi has a decent turnover, the bottom line numbers drop dramatically due to inefficiency in expense management,” said a recent report from Brac-EPL.
Its asset turnover is half that of Grameenphone with no tendency to improve efficiency.
“Therefore, it appears that Robi is inefficient in using his funds to build sites for his subscribers,” the report says.
Robi has a much lower operating margin than Grameenphone due to the higher cost of income, maintenance, and depreciation expense.
Robi had 5.1 million subscribers, representing 30% of the telecommunications market in Bangladesh.
Proposed listing, Robi will be a 61.82% owned subsidiary of Axiata, Robi Axiata revealed today. Previously, Axiata held 68.7% of the entity’s shares and Bharti Airtel held the remaining 31.3% of the company.
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