Robi CEO’s shares face 3-year lock-in

Like promoters, directors and the existing owners of 10% or more shares, Robi Axiata Chief Executive Officer (CEO) Mahtab Uddin Ahmed also had to hold on his company shares for three years after the trading debut, ordered the securities regulator.

Mahtab Uddin Ahmed, the homegrown managing director and chief executive officer of the multinational telecom operator, is in the company board as a nominated director and also an employee.

After the ongoing public subscription of the company, Ahmed is going to receive 25.87 lakh Robi shares, subscribed under Employees Stock Purchase Plan (ESPP).

An ESPP is a company-run programme in which participating employees can purchase company stock.

Like all other employees' shares, at first, the CEO's receivable shares were also locked in for two years as he was initially treated as an employee only.

But, later, Bangladesh Securities and Exchange Commission (BSEC), considering his directorship at the company, extended the lock-in period by one more year.

The BSEC conveyed its order in a letter sent to the company and its issue manager on Tuesday, instructing to act accordingly.

Robi Axiata, the country's second largest telecom operator, opened its IPO subscription on Tuesday, with an aim to raise Tk523.7 crore, issuing primary shares at Tk10 face value each. Of the amount, Tk136 crore is being collected from company employees subscribing to 13.61 ESPP shares.

Robi seeks to expand its network with investors' money being raised through the country's largest ever IPO.

Leading local merchant bank IDLC Investments is working as the issue manager to help Robi complete the IPO process.

Till the end of June this year, Robi secured 4.8 crore subscribers, representing nearly 30% market share, while its number of internet subscribers was 3.2 crore, securing 67% market share. On 15 October, the company announced that it had reached the milestone of five crore subscribers already.

In 2019, its total annual revenue was Tk7,400 crore. That year, Robi made a meagre net profit of less than Tk20 crore while EPS was Tk0.04 only. Its paid-up capital was Tk4,700 crore.

Against flat revenues amid the Covid-19 pandemic in the first half of this year, Robi made a net profit of Tk77 crore and EPS was Tk0.16. The company incurred losses during the same period last year.

Robi commenced its operations in 1997 as Telekom Malaysia International (Bangladesh) under 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 its name. The merger also helped the company see profits later on.

Currently, Robi's 68.69% of controlling shares are held by Malaysian telecom giant Axiata Group Berhad. Indian Bharati Airtel remains the second largest shareholder of the company following its acquisition of Robi shares owned by Japan's NTT Docomo earlier this year.

Investors can apply to buy Robi primary shares till 23 November.