Ismail Hossain |
Published: 05 Aug 2022 20:51:13
Mizanur Rahman, a retail investor, struggled as the stock market fluctuated for a while after investing much of his life savings in the stock market. During this time the market collapsed and the general consensus from all stakeholders including investors, regulators and ordinary people that a new company should enter the market to reignite hope. Amidst the uncertain trends, Mizanur looked for a stable financial solution for the next few years, until 2009, when Grameenphone entered the Bangladesh stock market, it finally broke through.
Much like a textbook example of where there’s a will, there’s a way, Mizanur’s will to transform his fortune earned him some Grameenphone stock through its initial public offering (IPO). He later bought a significant number of shares, which may have been one of the best decisions of his life from an investor’s perspective. Because he held the shares for a long time, Grameenphone’s “blue-chip” shares rewarded Mizanur and many others like him with handsome returns that exceeded their expectations.
Wireless carrier Grameenphone (GP) went public at a time that was pretty desperate for existing retail investors. There was an undeniable need for a massive pull-up for the stock market. Grameenphone, like a savoir, decided to become a part of the market and share the value of the prestigious organization with the public. Grameenphone has decided to list 69.44 million IPO shares. They applied to the Bangladesh Securities and Exchange Commission (BSEC) on July 29, 2008, and the BSEC approved it on August 24, 2009. Government approval paved the way for this opportunity and soon Grameenphone began breaking records and making history market. Many small and medium-sized investors like Mizanur could finally find a company they can rely on, afford their shares without much risk and expect significant profits in a short period of time. The wheel of fortune had started spinning with favorable momentum for countless investors like Mizanur. With a business model of continuing operations with governance and ensuring stock value, as well as maintaining transparency and integrity throughout the value chain, Grameenphone chose to share the value of the company with the people of Bangladesh, meaning the people of this nation are the would own Grameenphone.
Through this IPO, Grameenphone shared its success with the people and transformed itself into a people company. With a market share of around 50 percent, Grameenphone was the first MNO to go to the capital market. This visionary debut itself was also a milestone in the history of Bangladesh’s capital market. Looking back, the stock market scenario has changed radically over the past 13 years, overwhelming volatility and other negative influencers. The existence and influence of Grameenphone in the market boosted the economy through cross-industry boom. As the IPO market evolved, GP’s IPO soon became an investment opportunity for the common people. There had been a popular period where GP shares were only available for Tk 70 (including Tk 60 premium) and it became a very hopeful opportunity for those like Mizanur with relatively less capital to nonetheless become part of the common dream.
With several milestones in the organization’s arsenal, Grameenphone saw a staggering total of 1.2 million applications, which was the highest in Bangladesh’s history. It also recorded the highest number of subscriptions with 17,577 million Tk, which was 3.62 times the IPO amount of 4860 million Tk. The total number of shareholders including sponsors, PPO and IPO was 351,199. On the very first day of trading, Grameenphone shares smashed all records, sending the Dhaka Stock Exchange (DSE General Index) up 764 points, while GP shares alone contributed 717 points. Each Grameenphone share opened at Tk 160 and rose to Tk 195 on the DSE. It closed up 153 percent at Tk 178.10 compared to the IPO price of Tk 70 each. It also brought a breakthrough rise in key indices on the DSE. The most important feature is that Grameenphone went public with its largest offering ever with 135 million common shares at 10k each. A total of 74,30,400 GP shares worth Tk1.32 billion were traded on the first exchange, making the mobile operator the top sales leader on debut day. Aside from regular profits, Grameenphone has also facilitated investors through lucrative dividends. In this way, Grameenphone shares became one of the best options that attracted not only local investors but also foreign institutional investors.
It has been a journey of more than a decade for Grameenphone in the stock market, safeguarding the dreams of Mizanur and thousands like him through smooth and transparent market operations. The MNO reported earnings per share (EPS) of Tk25.28, net asset value (NAV) per share of Tk36.94 and net operating cash flow per share (NOCFPS) of 42 for the year ended December 31, 2021, 82 tk; compared to k 27.54, k 38.59 and k 24.86 in the same period of the previous year. He recommended a final cash dividend of 125 percent for the year ended December 31, 2021 (250 percent total cash dividend), including a previously paid interim cash dividend of 125 percent.
According to DSE data forecast as of May 31, 2022, the paid-up capital of Grameenphone is Tk13.50 billion and the authorized capital is Tk40 billion, while the total number of securities remains at Tk1.35 billion. The sponsors own 90 percent of the shares in the company, while institutional investors own 5.17 percent, foreign investors own 2.76 percent and the general public own 2.07 percent. After Grameenphone’s listing, the participation rate of PPO investors was 4.86 percent and IPO investors was 5.14 percent.
For 2021, Grameenphone secured total sales of Tk 143.1 billion, representing annual growth of 2.5 percent. The net profit after tax of the MNO for the full year was Tk 34.1 billion, which has indeed played a crucial role in improving the state of the capital market and the mass economy, especially after the damage caused by the Covid-19 pandemic. The huge increase in the income of the nation’s connectivity partner has also been beneficial to the treasury at the same time.
Arif Khan, a former Bangladesh Securities and Exchange Commission (BSEC) commissioner, noted how GP’s reasonably high IPO yields became a market phenomenon, prompting people to align their personal growth and vision with Grameenphone’s bring to. “Grameenphone’s entry into the capital markets was a milestone in the country’s capital markets history,” he said. “It has enabled the scale to share profits for the masses with such a company that is also a household name in the country. People have consistently benefited from GP shares with cash dividends since their inception,” he adds, noting towards the profit. Win situation for both sides in trading.
Grameenphone’s IPO introduced fresh new concepts such as informal bookbuilding to the capital market. It demonstrated the potential of our capital market and thus strengthened the country’s profile in the global context. Previously, the supply and demand for quality stocks on the capital market diverged. Grameenphone’s entry and expansion into the capital market over time has narrowed this gap.
As a digital connectivity partner and leading technology services company in Bangladesh, Grameenphone has been one of the most prominent names on the country’s premier stock exchange since entering the capital market. It has alone held the highest market cap since its journey into the public eye began with an expanded vision to share the multinational’s ownership with the masses. As a responsible business practitioner by principle, Grameenphone’s original vision was to empower societies through connectivity, thereby reducing the digital divide. But as demand grew across the country, the need for connectivity turned into a shared dream, inspiring the company to step foot in the market with IPOs or IPOs.
Foreign direct investment (FDI) like Grameenphone creates value and opportunity for local communities with goodwill and brand equity, contributes to LDC closure and is a role model in attracting more FDI to Bangladesh.
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