Robi roars in debut trading Co shares surge 50pc

Shares of Robi Axiata surged 50 per cent to Tk 15 on Thursday in debut trading in what can be interpreted as a positive gesture by investors.
Such an increase in debut trading is the highest limit set by the regulator.
Critics feared Robi's listing will impact the bourses as the average daily turnover in the stock market in recent days has been almost equivalent to the cellphone company's IPO size of Tk 5.24 billion.
But they now say Robi's growth in terms of subscribers is better than that of Grameenphone, the country's largest mobile telephony firm.
Investors placed buy orders for more than 180 million shares during the pre-opening session.
But only 80 trades were executed with a trading volume of 117,162 shares of the mobile phone operator amounting to Tk 1.76 million, according to DSE statistics.
This led to the halt of Robi's trading at one stage of the transactions and many withdrew the orders.
At the port city's bourse, the Chittagong Stock Exchange, 26 trades were executed with a trading volume of more than 2.97 million shares worth Tk 44.45 million.
The company's share price also rose 50 per cent to close at Tk 15 each at CSE, after hitting the highest ceiling.
Robi, a venture between Malaysia's Axiata Group and India's Bharti Airtel, raised Tk 5.24 billion taka in the initial public offering. The company sold about 524 million or 10 per cent of the firm's total outstanding stocks.
GP's IPO was the biggest before Robi as the Telenor arm had raised Tk 4.86 billion in 2009.
During its debut in 2009 on the Dhaka Stock Exchange, Grameenphone's share opened at Tk 160 and rose to as high as Tk 195.
However, it closed by 153 per cent at Tk 177.30, compared with the IPO price of Tk 70 each.
Meanwhile, the market capitalisation of the DSE jumped by 3.17 per cent or Tk 131 billion to Tk 4,257 billion on Thursday from Tk 4,126 billion a day earlier.
Similarly, Robi's market capitalisation reached more than Tk 78.56 billion according to Thursday's closing price, data from the CSE showed.
Market capitalisation represents the aggregate value of a company or stock. It is calculated by multiplying the number of shares outstanding with their current price per share.
Analysts said investors were bullish as they got confidence in the debut trading. Share prices of many fundamentally sound scrips have been surging in recent times.
"Many investors, especially fresh ones, placed buy orders on the day, but almost all got dismayed as only a few were lucky to purchase," said an analyst.
"There was fear that a mega size issue like Robi would put some negative impact on the market," he added.
He said Bangladesh has a huge room for growth for mobile phones and data uses.
"Investors are probably considering its future prospect. For this reason, individual investors and institutions were desperate to purchase Robi shares," he told the FE.
He said one of the downsides of Robi is its ownership had changed many times in the past, but on the upside it is now a stable corporation.
He predicted the sale pressure may increase on the second day trading when the price will be allowed at Tk 22.5 or a further 50 per cent rise.
"I placed orders for the purchase of 100,000 shares in the morning, but could not buy a single one," said an official at the Al Arafah Islami Bank brokerage.
On the other hand, the securities regulator says that there was poor trade on the debut.
"We want to make the market vibrant and for this reason, we are giving importance on the primary market," said Rezaul Karim, spokesperson for the Bangladesh Securities and Exchange Commission (BSEC).
He said the commission has approved funds through IPOs, rights and other vehicles worth Tk 97 billion during the last six months. But during the last five years ending June 2020, such approvals were worth Tk 1.1 trillion.
He said the inclusion of a large corporate body like Robi will have a positive impact and help increase the depth of the market, thus boosting confidence in the investors.
Robi, which received the regulatory approval from the BSEC on September 23, raised a capital of Tk 5.23 billion under the fixed price method.
The telecom sector company issued roughly 523 million shares with a face value of Tk 10 each and raised funds from a wide range of investors, including its own employees.
More than 1.28 million IPO applicants vied for Robi's IPO, of which 465,290 were selected as winners of the lottery, according to a statement.
Robi's IPO shares have been oversubscribed by 5.74 times against the public offering of nearly Tk 3.88 billion.
As per un-audited financial statements, for the three months ended on September 30, 2020, its net profit after tax was Tk 388.85 million, pre-IPO EPS was Tk 0.08 and post-IPO EPS was Tk 0.07.
However, for nine months from January 2020-September 2020, its net profit after tax was Tk 1,160.32 million, pre-IPO EPS was Tk 0.25 and post-IPO EPS was Tk 0.22. The net asset value (NAV) per share was Tk 12.83 as on September 30, 2020.
Robi had a subscriber base of 51 million at the end of November this year, which is 30 per cent of the total market share. Of them, 34.7 million use the internet.
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