Grameenphone, the country's largest mobile phone operator, has finalised its plan to raise $300 million (Tk 2,058 crore) -- $ 150 million from the stock market and the rest through private placement or pre-IPO.
According to sources, the number one mobile phone company took the decision after revising its valuation at $3.2 billion last month. Earlier an independent firm valued the company at $3.75billion.
Grameenphone yesterday said a formal application for the IPO with expected gross proceeds of up to $150 million is expected to be filed with the Securities and Exchange Commission (SEC) and other authorities by the end of this month.
The company also said it intends to conduct a pre-public offer of its shares with expected gross proceeds of up to $150 million prior to the IPO.
"We are hopeful that Grameenphone's inclusion in the country's bourses will further highlight the potential of capital markets as an important engine of economic growth," said Anders Jensen, chief executive officer of Grameenphone.
He said the Grameenphone IPO will also enable the people of Bangladesh to share the success of the company.
Sources said Grameenphone will offer each share at Tk18 including a premium of Tk17. The raised money will be completely used for Grameenphone's network development programme.
The market analysts assumed that such a big IPO will help to enhance the market's depth and encourages the other mobile operators to be listed.
Grameenphone, which launched operations in 1997, is 62 percent owned by Norway's Telenor, with the balance 38 percent being held by Grameen Telecom, part of local Grameen Group. The company had been under pressure from Bangladesh Telecommunication and Regulatory Commission and SEC to list on the Dhaka Stock Exchange (DSE).
Grameenphone, according to Telenor's financial report, posted 7 percent higher revenue at NOK (Norwegian Krone ) 4,622 million (Tk 6,138 crore) in 2007 compared with NOK 4,314 million (Tk 5,729 crore) in 2006. Its operating profits, however, dropped sharply by about 33 percent to NOK 1,239 million (Tk 1,645 crore) during the year compared with NOK 1,836 million (Tk 2,438 crore) in 2006.
Intense competition from rivals including Telekom Malaysia-promoted AKTEL and Orascom-owned Banglalink has, however, seen Grameen's market share slip from a dominant 63 percent in 2006 to 47 percent in 2008.
"It will be a breakthrough for the country's capital market history," said Abu Ahmed, professor of the Department of Economics of Dhaka University.
Ahmed said Grameen's IPO plan will be a big encouragement for the other mobile phone operators.
Grameenphone submitted its IPO roadmap in January this year. As per the roadmap, the company is scheduled to go for public listing by the end of September 2008.
Citigroup Global Markets has conducted the valuation of the company.
Grameenphone officials said Citigroup Global Markets Bangladesh Limited has been appointed as the global coordinator and issue manager as well for the Tk 243crore paid up capital company.
Non banking financial organisations experts said the SEC should scrutinise the amount of premium likely to be offered by Grameenphone to give the benefits of the IPO to investors.
With the listing on the capital market, the company will get 10 percentage point corporate tax exemption from 45 percent.
Grameenphone, with the Norway's Telenor being its major stakeholder, holds the top position in the market with 20.31million customers, followed by Egyptian Orascom Telecom's Banglalink with 9.46 million and Aktel, Telekom Malaysia International being its major stakeholder, with 7.85million customers as of June.
At bottom of the pyramid, number of customers of the UAE based Warid Telecom International increased significantly to 3.31million in June, whereas number of customers of the country's oldest and only CDMA operator Citycell's reached 1.70million in June 2008.