Bangladesh regulator summons Robi Axiata after its failure to announce dividends

The Securities and Exchange Commission has summoned officials of Robi Axiata in the wake of their decision not to give dividends to investors.

The officials of the telecom firm, the second largest in Bangladesh in terms of subscribers, will have to appear at the commission in Dhaka’s Agargaon at 12:30pm on Tuesday.

Mohammad Rezaul Karim, an executive director of the SEC, confirmed the development to bdnews24.com on Monday night, hours after Robi disclosed its decision.

The newly listed telecom firm published a summary of its audited financial statements approved by its board of directors for the year 2020 on its website on Monday.

The company’s earnings per share surged more than eight times year-on-year to 0.33 taka in 2020, but it did not announce dividends for the year in a move that disheartened the investors.

The company is scheduled to virtually hold its 25th annual general meeting on Mar 21, when the statements will get the final approval.

Decisions made by the board are not usually changed at the AGM.

Robi said it would brief journalists about its fourth quarter financial record of 2020 on Tuesday noon. CEO Mahtab Uddin Ahmed and members of the board were supposed to attend the event.

But after the latest development, Robi informed the media that it was pushing the news conference back to 3pm.

On Dhaka Stock Exchange, Robi’s price-to-earnings or P/E ratio stood at 139.39.

The ratio is much higher than 14.67 of Grameenphone, the largest mobile telecom operator of the country in terms of subscriber base.

Market analysts consider a share as a “good one” if the P/E ratio is between 15 and 20. The companies with a promising future can have higher P/E ratios.

After hitting the market by the end of last year, Robi is trading under the ‘N’ category.

In the first 15 days of trading, Robi share price increased by 601 percent to Tk 70.1 from Tk 10 before dropping.

On Monday, over 10.4 million Robi shares were traded at Tk 46 per issue, up by Tk 4 from Sunday.

Last year, Robi’s net asset value or NAV per share rose to Tk 13.9 in 2020 from Tk 12.64 the previous year.

Its net operating cash flow per share or NOCFPS dropped to Tk 5.36 in 2020 from Tk 6.1 in 2019.

The SEC in September last year gave regulatory approval to Robi to raise Tk 5.2 billion from the capital market through the IPO to expand its network.

Robi offloaded about 524 million shares or 10 percent stakes of the company, priced at Tk 10 each. The company plans to expand its network with Tk 5.15 billion from the IPO. The remaining will be spent on IPO expenditures.