Term Paper

Group 4
“Company: Robi Axiata Limited”

Corporate Financial Strategy (FIN 620)

Section: 01

Submitted to:
Syed A Mamun, PhD, FCMA

Submitted by:

Name ID
Sumaiya Selim Sushme 24164087
Taj Nahar Niha 23164010
Zaima Zareen 22164039
Nurina Durba Gain 23164058
Tasfia Tasneem 23364003

BRAC Business School

BRAC University
Date of Submission: April 29, 2024

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 Name ID Worked on

Financial Analysis & Calculation of

Sumaiya Selim Sushme 24164087 Enterprise Value of the Company
Competitive Analysis & ESG Impact
Taj Nahar Niha 23164010 Analysis
Ownership Analysis & Corporate Strategy
Zaima Zareen 22164039 Analysis
Business Model & Value Chain Analysis &
Nurina Durba Gain 23164058 Corporate Governance Analysis
Tasfia Tasneem 23364003 Introduction, Industry Analysis & Conclusion

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Table of Content:

Introduction about the Company………………………………………………………………..05

Industry Analysis……………………………………………………………………………….05

Business Model and Value Chain Analysis…………………………………………………….06

Ownership Analysis…………………………………………………………………………….14

Corporate Governance Analysis………………………………………………………………..16

Competitiveness analysis……………………………………………………………………….18

Corporate Strategy Analysis……………………………………………………………………22

Financial Analysis……………………………………………………………………………...26

Calculation of Enterprise Value………………………………………………………………..36

ESG impact Analysis…………………………………………………………………………...42

Conclusion………………………………………………………………………………………43

References………………………………………………………………………………………45

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Introduction about the Company

Robi Axiata is one well-known telecom provider that has had a big influence on Bangladesh's
telecom market. Robi is already a top option for millions of users thanks to its wide network
coverage and cutting-edge services. This term paper will examine Robi Bangladesh's origins,
development, and achievements as well as how it has affected the nation's telecom market.
Board’s Size (number of Board members – minimum 5 and maximum 20). Independent
Directors must make up at least one-fifth (1/5) of the total number of Directors. Out of the
seven (seven) non-executive directors, there are two (two) non-executive independent
directors (ID).

Industry Analysis
Over the years, Bangladesh's telecom sector has seen substantial expansion and development. With
more than 160 million people living there, the need for telecommunication services has been rising
over time. A small number of very large companies, such as Robi Bangladesh, Grameenphone,
and Bangla link, dominate the business.

1.A rising percentage of people using mobile phones - Maintained by big businesses including
Robi Bangladesh, Grameenphone, and Bangla link

2. A rise in the need for telecom services

3. Government programs to encourage the growth of a sector

4.Technological developments, such as 4G and the introduction of 5G; obstacles in network quality
and infrastructure development; and the growing importance of mobile phones for communication
and access to digital services.

5. E-commerce and rising technology opportunities - Industry's critical role in socioeconomic

development

The rising rate of mobile penetration is one of the main reasons driving Bangladesh's telecom
sector's expansion. Because they give users access to a variety of digital services, communication,
and information, mobile phones have become an indispensable aspect of peoples' lives.
Smartphone adoption and mobile data usage have increased as a result of this. The Bangladeshi

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government has been promoting the growth of the telecommunications industry in recent years.
Programs include the National Telecommunication An atmosphere that is conducive to investment
and innovation has been established by initiatives like the National Telecommunication Policy and
the growth of the Information and Communication Technology (ICT) industry. Technological
developments have also been experienced by the sector with the launch of 4G and ongoing
preparations for the deployment of 5G networks. Better connectivity and quicker internet speeds
have been made possible by these developments, creating new prospects for e-commerce, digital
services, and other cutting-edge technologies. Still, there are issues with network quality, pricing,
and infrastructure development. To satisfy the market's rising needs, industry participants are
making investments in enhancing service quality and broadening network coverage. All things
considered, Bangladesh's telecom sector is a vibrant, quickly growing one that is essential to the
socioeconomic advancement of the nation. ..An atmosphere that is conducive to investment and
innovation has been established by initiatives like the National Telecommunication Policy and the
growth of the Information and Communication Technology (ICT) industry. Additionally, the
sector has It has revolutionized communication, information access, and business dealings,
becoming a necessary component of daily life.

Business Model and Value Chain Analysis

According to the integrated annual report 2023, Robi Axiata Ltd, initially a telecommunication
company, has been transitioning its work systems and processes to transform its business type to
a tech-based corporation. Their current business model mirrors this change in their value-chain.
To elaborate its business model and analyze its value-chain, one needs to understand its core
values, company culture, types of capital inputs, strategic objectives, capital outputs (revenue and
idea generation and human development) and value creation.

Values and Culture

The firm has a customer-centric approach to meeting their commitment to Exceptional
Performance and Uncompromising Integrity (UI-EP) for value creation. Four guiding principles
drive their ambition to be a leader in the digital market for providing customer-centric data and
digital services. These are as follows:

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1.Be Agile: At Robi, questions are welcomed and insights are gathered from information sharing
and analysis. Moreover, following trends to identify opportunities and find solutions, and learning
from past failures are considered important for moving forward towards a brighter future.

2.Inspire to Innovate: The customer-focused approach allows them apprehend customer’s

problems and discover their desires, which creates scope for innovation and enhance customer
satisfaction. Creating a sense of purpose among people is emphasized. Continuous improvement
of processes is encouraged to improve service speed.

3.Collaborate to Deliver: Respect, trust and transparency are perceived as crucial qualities for
communication in a multi-cultural and inclusive environment. They work cohesively with all
stakeholders for accomplishment of their goals.

4.Do Digital: Robi nurtures an entrepreneurial mindset among its employees; they can freely share
their new ideas and some calculated risks are taken for innovation. Lessons learned from failures
are documented for further developments. It maintains unwavering service quality.

Strategic Objectives
Robi has a set of strategic objectives that unpins their resource planning.
Market positioning: Robi aims to be the market leader, offering seamless digital services and
network coverage, for optimal customer satisfaction.

Versatility: It is currently undergoing a transformation from telecom to tech-driven firm that

provides customer-centric data and a myriad of digital services to adapt to the era of information.

Client Satisfaction: Maintaining customer relations and ensuring positive experience are at the
center of all of its functions.

Budget Management: Cost-efficiency has become one of its priorities in its value-chain. It has
entrusted its IT department to reduce operational costs by merging IT systems and applications.

Social Responsibility: The firm sincerely takes into account the welfare of the communities, its
employees, the environment and the government.

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Digitization: Robi understands the necessity to cope with the pressing need for digital
transformation, and strives for excellence in that area.

Operational Efficiency: It recognizes the essence of operational excellence for user engagement
and agile problem-solving.

Best Practices Focus: It emphasizes on industrial benchmarks to gain competitive edge.

Capital Inputs and Outputs

Robi invests in six types of capitals to meet its strategic objectives and produce the best outcomes
Financial Capital
Axiata and Bharti’s long-term investments, accounting for 90% of the shares, has created a robust
financial foundation. Its equity capital and market capitalization amount to Tk. 67 and Tk. 157
billion. This supports its aspirations for scaling its digital solutions for maximum profitability and
growth.

Financial performance
Here is a summary of Robi’s financial performance:
ROA: 1.5%
Gross Profit Ratio: 55%
Net Profit Ratio: 3.2%
EBITDA Coverage Ratio: 37.3
Return on Invested Capital: 8.6%
Current Ratio: 0.21x
Quick Ratio: 18.3%
Earnings per share: BDT 0.61
Price-earnings: 49.0
Debt-to-equity: 0.22x
Return on equity: 4.8%
Robi’s a total revenue peaked at BDT 9,942 crore in 2023, an increase by 15.8% from last year.
Its total capital expenditure was BDT 1,903. Its EBITDA accounted for BDT 4,599 crore (up by

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around a quarter) and it earned a net profit of BDT 321 crore, a sharp increase by 75% from last
year. It paid a large amount of tax, totaling Tk. 5,661 crore in 2023 to the Government Exchequer,
which contributed to 57% of the revenue. The Board of Directors, impressed by the astounding
performance, decided on a ten percent cash dividend. (Integrated Annual Report, 2023)

The company had the highest number of new subscribers (43 lakh), and maximum 4G network
coverage (98.8% of the country’s population) last year. Moreover, data experience and voice
quality were better by 130% and 50% respectively, while call drop plummeted to 0.2%. Their
monetary and investment success can be attribute to achieving these milestones. (Integrated
Annual Report, 2023)

Manufactured Capital
Broad network coverage and excellent service quality are the results of Robi’s nationwide network
systems including towers, base stations, site infrastructure, improvement of software and hardware
for enhanced network capacity, investment in maintenance and new technologies. It has been
serving entrepreneurs, local businesses, multinational corporations and millions of individuals in
villages and urban areas. (Integrated Annual Report, 2023)

Network performance is a basic tenet for client satisfaction and loyalty in the data-driven industry.
Robi’s widespread and well-maintained network infrastructure not only creates consistently
positive customer experiences, but also strengthen its image and competitive position in the
market. Its strategic actions to maintain the quality of its network has led to significant growth.
(Integrated Annual Report, 2023)

Client Satisfaction
Uniform video experience across the country with majority of the customers streaming 360p
videos in 4G has been one of Robi’s biggest achievements. Aside from this, it eliminated less than
3Mbps cell coverage by 5% in the former year. Shutdowns of 3G in 85% of the network by the
end of 2023 as planned contributed to notably faster speed and improved quality of 4G services.
The rest of the areas in the capital city will be closed down in early 2024. (Integrated Annual
Report, 2023)

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Network Availability
Proactive disaster management and operational efficiencies were instrumental in uninterrupted
network availability despite regional and countrywide power shortages and periodical
malfunctions in the grid lines. Remarkably, Robi’s task force handled almost 96% of network
issues before receiving customer complaints. The company’s rollout delivery went up by 58% in
2013, with infrastructure readiness maxing at 544, withstanding the embargoes on
commercialization of power, owing to extreme weather patterns. (Integrated Annual Report, 2023)

Fault Testing and Power Monitoring

A test bed is in place to check the functionalities of returned RAN and MW equipment and faults
in ports, connectors and so forth. Repairing and reusing equipment has drastically drove down
capital expenditure during the year. (Integrated Annual Report, 2023)

There is a central dashboard for monitoring daily energy use and grid availability, as well as early
anomaly detection. (Integrated Annual Report, 2023)

VoLTE Traffic
Voice over Long-term Evolution (LTE) (VoLTE) is a system in our phones and carriers,
transmitting our voices over calls. Robi has seen a consistent growth in the traffic of VoLTE, as a
result of a steep increase of voice calls from 3% to 18% in 2023, with a target to increase it to 32%
this year. (Integrated Annual Report, 2023)

IT Team’s Accomplishments
One of the important actors in Robi’s phenomenal growth last year was its IT team whose focus
on simplification and operational efficiency led them to achieving most of their strategic
objectives.

Strategic initiatives of the IT team contributed to a high-performance (99.6%) and extensive

availability (99.9%) and a drastic decline in number of revenue-hurting incidents. Convergent
Billing Solution (CBS), Automatic Device Management System (ADMS), SAP Hana High
Availability (HA) and Integrated Campaign Management Solution (ICMS) among others along
with database and system upgrades have fortified security, performance and cost-savings.
(Integrated Annual Report, 2023)

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Apart from integration of new systems, merging of apps decreased the number of applications by
13%, reducing the annual maintenance contract costs and hardware, while improving efficiency.
For instance, the inclusion of RabbitHole on the SingleApp boosted revenue and user engagement.
Moreover, core IT achieved cost-efficiency through optimization of capex and opex. (Integrated
Annual Report, 2023)

Shifting to open-source databases, introduction of five open APIs on the TM Forum and CBS, an
advanced data platform, ahead of deadline proved effective for digital transformation and cost-
efficiency. Consequently, their subscriber base reached 30 million and they won the Diamond
Badge from the TM Forum. (Integrated Annual Report, 2023)

Human Capital
Robi’s emphasis on skill development programs for its employees was a key factor in its transition
to a digital tech-based company. The firm realized the essence of a diverse, inclusive and trained
work force in its transformational journey. Hence, it invested a whopping 4,123 million taka on
remuneration and benefits and 11.7 million takas on training and development. (Integrated Annual
Report, 2023)

Furthermore, the firm integrated new values focusing on customer-centeredness, valor for change
and passion for collaboration into their workplace culture. This cultural shift paved the way for
customer-centric solutions, innovation and team efforts. (Integrated Annual Report, 2023)

Robi has HR business partners and talent acquisition strategies and talent development programs,
namely Graduate Trainee, Robi Accelerated Development Program (RADP), Talent Acceleration
Group (TAG) and apprenticeships to nurture talent and diversity. This allows the newcomers to
adapt to the company culture, and have a clear understanding of their roles and the local and global
market conditions. It organizes in-house training sessions on data analytics, Agile Methodology,
Balanced Scorecard: Strategy Mapping, Labor Law and other topics. It also funds their learning
on certified digital platforms. (Integrated Annual Report, 2023)

The company has taken many initiatives to enhance employee experience and well-being. It
provides, several benefits and facilities, such as well-rounded healthcare, day-care centers and a
fully-equipped gymnasium, to the employees. Moreover, they have shifted to a more modern office
with cutting-edge technologies. They offered training on safe driving and fire safety, and had safety

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and well-being week, which included assigning floor marshals to oversee the safety of their
workplace. (Integrated Annual Report, 2023)

Robi has enticing rewards like the Robi Championship Award for employees to reinforce their
excellent performance and commitment to the organizational objectives. Its recognition programs
are designed to attract and retain top talent and galvanizing life-long learning and creativity. All
these efforts have not only rewarded Robi with the Best Employee Award, but also a monthly
revenue of over 5.7 million per employee. (Integrated Annual Report, 2023)

Intellectual Capital
Robi’s new business model encompasses relevant products and services serving the ever-changing
needs of customers. A vital element of this transformation is their digital ecosystem including
video-streaming platforms and health service apps. State-of-the-art technologies, brand, reputation
and personalized customer experience are parts of their intellectual capital.

Their efforts to create pleasant experience paid off in top NPS rankings, significant increase in
touchpoint satisfaction and 97.5% post-paid customer subscription. They even introduced door-
step service to broaden their service outreach to 101 thanas. Robi has an elite program for loyal
customers, offering exclusive and personalized services, for customer satisfaction. (Integrated
Annual Report, 2023)

During 2023, the company elevated their value-added services (VAS) with a customer-centric
attitude, strategic partnerships and digitization. Health Plus, for example, is a healthcare app for
minors, mothers and others, which has integrated medicine delivery and micro health services.
Robi-Shadhin music streaming platform formed last year has been giving customers access to a
wide-ranging collection of songs and podcasts. Partnerships with Spire to Innovate and OTT
platforms, and content bundling, focusing on user-friendliness, have given them a strong presence
in the digital world. Exciting new campaigns have enhanced user engagement and promoted their
services and products, contributing to their skyrocketing revenue. (Integrated Annual Report,
2023)

Lastly, Robi takes data-driven approaches to forecast trade performance, fix optimal prices and
invest efficiently. Airtle’s marketing strategies are catered to the young people, galvanizing
storytelling and collaborations. The company has made its transition into a Techco a successful

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endeavor with cutting-edge technology, customer satisfaction and engaging marketing efforts.
(Integrated Annual Report, 2023)

Social & Relationship Capital

Robi has been contributing to the socio-economic development of Bangladesh through its purpose-
driven business model. They strengthen their relationships with various stakeholders, including
customers, community, government, regulators, investors, suppliers and business partners through
numerous initiatives. Based on trust, these relationships have fostered a favorable environment for
sustaining business expansion and create value for their stakeholders. (Integrated Annual Report,
2023)

Robi launched a couple of initiatives to build their social capital. Their online skill development
platform, HaateKolome, offers free vocational training to athletes, expat workers, electricians,
sewing machine operators, farmers and fisher folk communities. This impactful initiative meets
multiple SDG goals, such as Decent Work and Economic Growth, Reduced Inequalities and
Quality Education. (Integrated Annual Report, 2023)

Furthermore, the company’s Bangladesh Safe Internet Forum in partnership with Save the
Children International and ActionAid Bangladesh raises awareness on cybercrimes and educates
children and women to protect themselves in the digital space. Moreover, they engage the youth
on matters of AI, block-chain, Internet of Things (IoT) and data analytics to ensure their
competitiveness in the global market. Thus, they are creating positive impact in the local
communities. (Integrated Annual Report, 2023)

Natural Capital
Robi has been dedicated to reducing its carbon footprints through its net-zero commitment by 2050
and its plan to more than halve its operational emissions by 2030. Their primary focus for
environmental sustainability as part of their Environmental, Social, and Governance (ESG)
framework is on waste management, energy efficiency, water management and curbing emissions.
They apply this framework for assessing climate risks for their network infrastructure and other
physical assets based on “3Rs” (reduce, reuse and recycle) of e-waste, and strategies to cut energy
use and carbon emissions like installing solar panels on their towers. (Integrated Annual Report,
2023)

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Additionally, the company has a good reputation for creating a positive and safe environment for
its employees. It has recently moved to a new office with top-notch facilities, including gyms and
daycare centers, and cozy set-ups, energy-saving lighting and fire safety equipment and fire-proof
materials. The entire office has been designed to boost productivity and creativity, while ensuring
employee well-being and safety. (Integrated Annual Report, 2023)

Apart from workplace and infrastructure modifications, Robi has been on a mission to deploy its
resources for the greater good outside the company. Over 13 lakh people have access to drinkable
water at ten major railway stations from the modern water dispensers Robi set up. It has also
planted more than 13,000 trees in the Sundarbans and Bandarban. (Integrated Annual Report,
2023)

In brief, Robi has a comprehensive action plan to address environmental concerns and promote
well-being of its employees, making it an environmentally and socially responsible corporate
citizen.

Revenue
Robi generates revenue from selling SIM cards, voice, non-voice traffic (SMS and MMS), data,
subscription and connection fees. It also sells connectivity devices. Moreover, it earns revenue
from its IT professional services and digital services as commission. (Integrated Annual Report,
2023)

Ownership Analysis
Robi Axiata Limited is not a family firm. It is a public limited company, and made its debut on the
Dhaka and Chattogram stock exchanges in December 2020 with the largest ever IPO in
Bangladesh.

The company was formerly known as Telekom Malaysia International (Bangladesh) and was
rebranded as Robi in 2010. It is the second largest mobile network operator in Bangladesh with
over 56 million subscribers. The company is not owned by a single family, but rather by two major
stakeholders - Axiata Group and Bharti Airtel - along with public shareholders. It is a publicly
traded company, not a family-owned business.

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Shareholders are typically not directly engaged in the day-to-day management of a business.
Shareholders, whether individuals, companies, or institutions, are owners of the company but are
not usually involved in the operational management of the business. The duty of managing the
business is typically left to the directors and company management. While shareholders have
certain rights and responsibilities, such as voting rights and the right to receive dividends if the
company makes a profit, their primary role is not to be directly involved in the management of the
business. Company directors, who may also be shareholders, are responsible for overseeing the
operations and decision-making processes of the company. In summary, shareholders are not
typically engaged in the direct management of a business; instead, they play a more passive role
as owners of the company, with their main responsibilities revolving around voting on key
company decisions and receiving returns on their investments.

The composition of shareholding for Robi Axiata Limited in Bangladesh includes various
stakeholders as follows:

• Axiata Group Berhad of Malaysia holds the controlling stake of 61.82%.

• Bharti Airtel of India holds 28.18%.

• The general public (DSE and CSE) holds the remaining 10% stake.

There is no specific mention of single family members holding shares in the company. Instead, the
major shareholders are large corporations from Malaysia and India, along with public
shareholders. Institutional investors, government entities, and general shareholders are not
explicitly mentioned in the provided information regarding the shareholding structure of Robi
Axiata Limited in Bangladesh.

The shareholding composition of Robi Axiata is as follows:

• Single family members do not hold a significant stake in Robi Axiata.

• Institutional investors own approximately 0.1% of the company.

• The government does not have a direct ownership stake in Robi Axiata.

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• General shareholders, which include the public and public companies, hold the majority of
the shares, with public companies owning around 90% and the general public holding about 9.9%
of the shares.

Therefore, the shareholding composition of Robi Axiata includes a small percentage held by
institutional investors, a significant portion owned by public companies, and a notable stake
belonging to the general public.

The shareholding composition of Robi Axiata Limited in Bangladesh has remained relatively
stable over the years. This ownership structure has been consistent, indicating a lack of significant
changes in the shareholding pattern of the company.

Axiata Group Berhad of Malaysia holds the highest percentage of shares in Robi Axiata Limited,
with a controlling stake of 61.82%.

The block shareholder of Robi Axiata Limited in Bangladesh is Axiata Group Berhad of Malaysia.
Here is a summary of the background and profile of this major shareholder:

• Axiata Group Berhad is an emerging leader in Asian telecommunications with a significant

presence in Malaysia, Indonesia, Sri Lanka, Bangladesh, and Cambodia.

• The company, along with its subsidiaries and associates, has approximately 120 million
mobile subscribers in Asia and is listed on Malaysia's stock exchange (Bursa Malaysia).

• Axiata Group Berhad holds the controlling stake of 61.82% in Robi Axiata Limited,
making it the largest shareholder in the company.

• Axiata Group Berhad is a Malaysian conglomerate with strategic mobile and non-mobile
telecommunications operations and investments in various countries, including India, Singapore,
Iran, Pakistan, and Thailand.

This information provides an overview of the background and profile of the block shareholder,
Axiata Group Berhad, in Robi Axiata Limited in Bangladesh.

The major shareholders of Robi Axiata Limited in Bangladesh, do not appear to be directly
engaged in the business management of the company. Robi seems to be run by its own
management team, independent of the major institutional shareholders.

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Corporate Governance Analysis
Robi has a solid corporate governance structure in coherence with the Axiata Group’s the core
values of Uncompromising Integrity and Exceptional Performance. As laid out in its Corporate
Governance Report, Robi sincerely complies with the Bangladesh Securities Exchange
Commission's Corporate Governance Code and its own corporate governance framework,
maintaining transparency, accountability, and effective risk management, through its Board of
Directors and specific committees. Its incorporation of ESG considerations into its business model
demonstrates its dedication to ethical conduct and sustainability. (Integrated Annual Report, 2023)

Robi’s ensure good governance through accurate financial reporting, lucid performance
management, impactful leadership and ethical conduct. It’s Investor Relations Unit has regular
and transparent communication with investors and provides them relevant and correct information
on a timely basis so that they can take informed investment decisions. They sit with or virtually
connect with institutional and individual investors as well as analysts to clearly understand the
specific needs of their investors, and meet those requirements to heighten shareholder value and
sustain long-term investment in the company. Moreover, every year Annual General Meeting
(AGM) is held on time. (Integrated Annual Report, 2023)

The company’s governance practices require multiple impartial actors. They oversee various
compliance and risky affairs for maintaining its brand reputation and legitimacy.

The Board of Directors

The following table enlists the name and positions of the directors:

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 Name of Directors Position in Board

Thayaparan S Sangarapillai Chairman (Resigned)

Vivek Sood Director/ Chairman

Dr. Shridhir Sariputta Hansa Wijayasuriya Director

Lila Azmin Binti Abdullah Director

Randeep Singh Sekhon Director

Kamal Dua Director

M. Riyaaz Rasheed Director

Soumen Ray Director

Nasir Uddin Ahmed Independent Director

Dr. M. Sadiqul Islam Independent Director

Rajeev Sethi Managing Director

The directors have well-defined roles and responsibilities and collaborates with the leadership
team of Robi. In adherence to BESC’s notification no. SEC/CMRRCD/2006- 158/207/Admin/80
dated 03.06.2018, the company has eight directors and one-fifth of them are independent directors,
who neither hold shares or sponsor the company, nor are affiliated with any shareholders (owning
more one percent or more shares) or sponsors. Dr. M. Sadiqul Islam has been an academic at Dhaka
University for 36 years and a fellow member of the ICMAB. Mr. Nasir Uddin Ahmed has over 36
years of professional experience as a Chartered Accountant and a member of ICSB and CIMA.
(Integrated Annual Report, 2023)

Thayaparan Sangarapillai, the former chairman of Robi, has more than 35 years of experience in
offering audit and business advisory services to clients in telecommunications, power, automotive,
property development and manufacturing sectors. He is a fellow of the Institute of Chartered
Accounts in England and Wales, and a member of the Malaysian Institute of Certified Public
Accountants and the Malaysian Institute of Accountants. After receiving training in accountancy
in London and becoming a Chartered Accountant in 1982, he was hired by PriceWaterhouse
Coopers (PwC) in Kuala Lumpur a year later. He was a partner in the Assurance Services of PwC

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Malaysia since 1994 and retired as a senior partner in 2015. (Thayaparan Sangarapillai appointed
as Chairman of Robi Board, 2021)

Vivek Sood, the former group CEO and managing director of Axiata Group Berhad’s Group,
replaced Sangarapillai in October 2023. He was the Joint Acting GCEO from June 2022 of Axiata
and Group Chief Financial Officer (CFO) in 2017. He was the Executive Vice President and Group
Chief Marketing Officer of Telenor Group, CFO and CEO of Telenor India, CEO of
Grameenphone in Bangladesh and COO and CFO of Tata AIA Life Insurance in India prior to
taking executive roles at Axiata. He is also the Chairman of the Boards of Axiata Digital &
Analytics Sdn Bhd and Boost Holdings Sdn Bhd. (Vivek Sood appointed as Chairman of Robi
Board of Directors, 2023)

Rajeev Sethi, the CEO of the company, formerly served as the CEO of Ooredoo, Myanmar’s
leading mobile operator, turning around its fate, and as an exemplary CCO of Airtel for Africa. He
was also the CEO of Grameenphone Ltd., a subsidiary of Telenor in Bangladesh. He has profound
industry experience in the ICT sector, playing leadership roles in Vodafone, HP, Hutchison
Telecom and Asian Paints. He attained an MBA degree in Marketing, Finance and Operations
form the Indian Institute of Management in Lucknow. (Rajeev Sethi new CEO for Robi, 2022)

M. Riyaaz Rasheed is a Fellow Member of the Chartered Institute Management Accountants of

UK (FCMA UK, GCMA), and a Fellow Member of the Institute of Chartered Management
Accounts of Sri Lanka (FCMA SL). He holds an MBA from the Postgraduate Institute of
Management of the University of Sri Jayewardenepura, Sri Lanka (MBA PIM), and a Bachelor’s
Degree in Pure Sciences (BSc). (Integrated Annual Report, 2023)

M. Riyaaz Rasheed, the CFO of Robi, has a career of 28 years, with 25 years of experience in
mobile telecommunication. He has worked in subsidiaries of multinational corporations such as
Millicom International Cellular SA of Luxemburg (Millicom), Emirates Telecommunication
Group Company (Etisalat) and CK Hutchison Group (Hutchison). Starting his career at Ernst &
Young, he was appointed as the Deputy CEO/CFO of Etisalat in Sri Lanka and the CFO of Celltel
Lanka Ltd. and Tigo Lanka Private Ltd in Sri Lanka. He has experience working in Hayleys Group
of Companies, the Sri Lankan conglomerate. Right before becoming the CFO of Robi, he was the
Deputy CEO at Hutchison Telecommunications, Sri Lanka. (Integrated Annual Report, 2023)

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Remunerations of a whopping BDT 21, 269, 037 were paid to the board of directors in 2023.
(Integrated Annual Report, 2023)

Committees

Robi has kept up a sound governance framework to guarantee integrity and compliance in all
aspects of its business. The Board of Directors is in charge of important areas like financial
reporting, internal controls, risk management, and regulatory compliance. It is assisted by a
number of committees, including the Board Audit Committee (BAC), Board Risk and Compliance
Committee (BRCC), Board Nomination and Remuneration Committee and OpCo Board
Investment Committee. Robi’s management committees include Management Audit Committee
(MAC), Defalcation Committee and Risk and Compliance Committee. (Integrated Annual Report,
2023)

The Board receives advice on compensation policies and nomination standards for directors and
senior executives from the Nomination and Remuneration Committee (NRC). The NRC, which
consists of one Independent and two Non-Executive Directors, assesses director qualifications and
suggests qualified candidates in addition to ensuring diversity on the Board. It also manages the
performance reviews of independent directors and the Board, and it creates training and human
resource policies to help the firm flourish. (Integrated Annual Report, 2023)

Ensuring regulatory compliance, efficacious internal controls, and financial reporting integrity are
critical functions of the Board Audit Committee (BAC). The BAC, which is made up of one
independent and two non-executive directors, examines financial accounts, suggests audit
appointments, and keeps an eye on external auditors' non-audit services. In order to preserve
governance standards, it also supervises internal audit and compliance procedures, assesses
internal control systems, and examines related party transactions. (Integrated Annual Report,
2023)

The organization's internal controls and governance procedures are strengthened by the
Management Audit Committee (MAC). The MAC, which is presided over by the CEO and is made
up of representatives from Management and Internal Audit, looks into findings from internal
audits, gives instructions for audit observations, and makes sure management information systems

20
and internal controls are adequate. It also monitors internal policy compliance and makes
recommendations on the annual audit plan. (Integrated Annual Report, 2023)

In addition to handling defalcation matters, the Defalcation Committee also makes sure that
company regulations and procedures are followed. The CEO is in charge of the committee, which
also includes the head of internal audit and other key management members. Its duties include
looking into complaints of misbehavior and deception, receiving complaints from whistleblowers
and protecting their confidentiality, deciding on investigation findings and sanctions, and
reviewing incidents. (Integrated Annual Report, 2023)

The Board is assisted in risk management and maintaining compliance with legal and regulatory
obligations by the Board Risk and Compliance Committee (BRCC). In addition to managing
cybersecurity, privacy, and compliance issues, the BRCC focuses on identifying, evaluating, and
tracking critical business risks. It guarantees the infrastructure and resources needed for risk
management, makes recommendations for risk management and compliance rules, and examines
management reports on risk and compliance actions. (Integrated Annual Report, 2023)

The Board is assisted by the Opco Board Investment Board Committee (OBIC) in making sure
that investment activities create value for shareholders. Its duties encompass capital allocation
supervision, appraisal of investment proposals, project milestone and return reviews, examination
of the strategic and financial justification for investments, post-implementation assessments, and
management recommendation of remedial measures. (Integrated Annual Report, 2023)

Independent Auditor

Acnabin audited consolidated and separate financial statements Robi Axiata Ltd. and its
subsidiaries as of December 31, 2023. They found the reports to be authentic and to have painted
a fair picture of the financial performance of the company in adherence to International Financial
Reporting Standards (IFRS). They conducted the conduct in compliance with International
Standards on Auditing (ISAs). They are an independent auditor of the company as per the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code). They conducted their responsibilities following the IESBA code and
the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. Revenue recognition,

21
valuation of telecommunication network assets and legal, tax and regulatory matters were primary
focus areas of the audit. (Integrated Annual Report, 2023)

Operating Expenses and Related Party Transactions

The company paid statutory audit fees, amounting to 57,500 taka, 10,000 taka for consultancy and
professional services and 3,345 taka as bank charges as of 31st December, 2023. In term of
shareholding position, parent company of Robi Axiata Limited held 9,999,940 ordinary shares of
BDT 10 each, six individual investors owned one share each. (Integrated Annual Report, 2023)

Competitiveness analysis
1. SWOT analysis for the company to determine its internal and external strength:

S W
SWOT
ANALYSIS

O T
STRENGTHS
1.4.5G network: 4G stands for fourth generation mobile internet service and Robi is the first and
only provider of 4.5G Cellular speed in Bangladesh. Robi has a very strong network in this sector.
Customer gets the best speed, with some enjoying 35 to 40 Mbps mobile data speed and enjoys
4.5G services at the same price as 3G. Robi currently has 1,500 towers across Bangladesh on the
4G network. Thus, it makes a very strong strength for Robi.

2.Strong CSR Activities: Robi, as a socially responsible brand, has taken up various lead
Corporate responsibility activities in the zones of ICT-Education, towards the practical
improvement of the nation. The organization has expanded help towards the nation's biggest

22
advanced instruction stage, 10 Minute School. More than 179,000 understudies have officially
subscribed to the advanced school while 55,000 understudies from everywhere throughout the
nation are presently dynamic individuals from the live class aggregate that is communicated
utilizing Facebook live feature.

3.Good brand image: Robi has been a dominant player in the market with a decent brand image
which ultimately results in increased sales and revenues through getting customers easily.

4.Customer Service: The leading digital service provider, Robi, plans to offer its customer service
in more than 5,295 Digital Centers (DCs) located across the country. The pilot phase of the project
started with the training of 200 entrepreneurs at the port city, Chattogram. Robi is implementing
this project in association with Access to Information (a2i).

5.Diverse Product Portfolio: Robi Axiata offers a wide range of telecommunications services
including voice, data, internet, and value-added services catering to various customer segments.

6.Strong Financial Performance: Robi Axiata has demonstrated consistent financial

performance, with steady revenue growth and profitability over the years.

WEAKNESSES
1.3G network: There is poor network coverage in 3G network across Bangladesh.
2.Hard to maintain two brands at a time: In 2010 Robi company changed its name to Robi
Axata Limited. As of November 2016, Robi Axiata uses two brands 'robi' and 'airtel' for its mobile
services. Airtel is an independent product brand of Robi Axiata. It is very difficult to handle two
big brands at a time. As airtel is more of a cheap brand, consumer most likely to consume airtel
over Robi. Therefore, Robi is losing its customer over Airtel.

3.Limited Geographic Presence: The company's operations are primarily focused in Bangladesh,
which may limit its growth opportunities compared to competitors with international operations.

4.Dependency on Third-party Infrastructure: Robi Axiata relies on third-party infrastructure

for network connectivity, which could lead to issues related to service quality and reliability

23
OPPURTUNITIES
1.Internet penetration: Bangladesh is a mobile-first country. According to Bangladesh
Telecommunication Regulatory Commission, the number of internet users shot up from 30.48
million in 2013 to 90.05 million in 2018. There is a huge scope for Robi to penetrate internet in
rural areas as other competitors haven't start doing that.

2.Government is focused on digital side: Digital Bangladesh is one of the nation's dreams, and
so special emphasis is given on the application of digital technologies to realise Vision 2021, which
commonly call Digital Bangladesh.

3.Growing Telecommunications Market: Bangladesh's telecommunications market is growing

rapidly, presenting opportunities for Robi Axiata to expand its customer base and market share.

4.Expansion of Data Services: With the increasing demand for data services, there is an
opportunity for Robi Axiata to capitalize on this trend by offering innovative data packages and
services.

5.Partnerships and Collaborations: Collaborating with other companies, content providers, or

technology firms can open up new avenues for growth and innovation.

THREATS
1.BTRC: BTRC stands for Bangladesh Telecommunication Regulatory Commission. which has
taken a hard-line stance against leading mobile operators Grammenphone and Robi in order to
collect a big amount of tax that have been long overdue, official sources have said. BTRC is set to
issue show-case notices to both the companies in this regard. Therefore, government not being
flexible has become a great threat to telecommunication industry.

2.Intense Competition: The telecommunications industry in Bangladesh is highly competitive,

with several established players and new entrants vying for market share, leading to price wars
and margin pressure.

3.Cybersecurity Risks: Increasing cybersecurity threats pose risks to Robi Axiata's network
infrastructure and customer data, potentially leading to financial losses and reputational damage.

24
4.Economic Instability: Economic downturns or fluctuations in currency exchange rates could
affect consumer spending patterns and investment decisions, impacting the company's financial
performance.

5.Emerging Disruptive Technologies: Disruptive technologies or business models introduced by

competitors or new market entrants could challenge Robi Axiata's traditional business model and
market position.

To maximize the profit, Robi needs to convert their opportunity to strength. They need to increase
their internet penetration strategy in the rural area to make it their strength. As Bangladesh is
becoming more digital oriented, Robi should take this opportunity and invent more services for
customer to draw their attention towards the brand and increase its value. It will also help them to
maximize their profits.

In order to overcome their weaknesses, they need to work more on 3G side as its coverage is not
that great. Besides Dhaka and Chittagong, they should focus on other cities as well to make more
sales.

Lastly, they should focus on one brand at a time. If they are focusing on robi for a month then they
should not do anything for airtel.

2.VRIO analysis to determine the competitive position of Robi Axiata

VRIO analysis is designed to analyze the internal resources and capabilities to find out the
competitive advantages for the company.

Value Rarity

VRIO

Imitability Organization

The VRIO framework for Robi Company are as follows:

25
1. Value: In terms of value, Robi has an experienced management team, outstanding market share,
diversified business exposure, and funding sources. They are one of the old telecom companies in
Bangladesh. Additionally, their premium customer service and quality help Robi give extra
exposure to their customers.

2. Rarity: The rarity of Robi is the billing system. Their billing system is immensely up to date,
and customer can pay their bill through the website, Bkash, Nagad, debit card, etc. This flexibility
for the customer makes Robi Company separate from the other company.

Access to exclusive spectrum licenses is relatively rare and provides a competitive advantage in
the telecommunications industry. Robi Axiata holds licenses for various frequency bands.

3. Imitability: The imitability of Robi is its logo, brand image, and value-added service. Other
companies may copy the different sides, but they cannot copy the logo because of the legality.

Secondly, their brand image in the market is strong because of the overall customer through the
advertising, sponsorship, etc., and they hardly had any negative impression in the market.

4. Organization: Robi has a standard management system from top to lower level, which helps
the whole company stand out separate from other companies. They also had an intense network
dealer around the country, leading loyal base customers.

Robi Axiata has a talented workforce with expertise in various areas of telecommunications,
enabling the company to innovate and adapt to market changes.

The company's operational efficiency, supported by robust systems and processes, allows it to
deliver services effectively and maintain a competitive edge.

Based on this analysis, Robi Axiata appears to have several valuable, rare, and difficult-to-imitate
resources and capabilities, which contribute to its competitive position in the telecommunications
industry in Bangladesh. However, continuous monitoring and adaptation are essential to sustain
and enhance this position in the dynamic market environment.

26
Corporate Strategy Analysis
Robi Axiata Limited is one of the leading telecommunications service providers in Bangladesh.
As a subsidiary of the Axiata Group, a large Asian telecom conglomerate, Robi's corporate strategy
is aligned with Axiata's overall strategic objectives:

• Focusing on continued organic growth and utilizing selective acquisition and partnership
strategies to grow in their target markets.

• Fulfilling the strategies of each of the key operating companies, including Robi in Bangladesh.
• Further improving operational synergies and efficiencies, and actively managing costs and
margins.

• Further developing their network coverage and enhancing network quality.

• Attracting and retaining a high quality workforce.
At the business level, Robi's vision is to be the market leader in the Bangladeshi
telecommunications market, not just in terms of market share but also by being an "employer of
choice". To achieve this, Robi's mission focuses on providing up-to-date products and services to
address the evolving needs of customers in Bangladesh. Robi's functional-level marketing strategy
aims to grow its market share by being number one in the market. Key elements of Robi's
marketing strategy include continuous network improvements, development of digital services and
platforms, strengthening regulatory engagement, enhancing customer experience, and fostering
innovation and partnerships. Overall, Robi's corporate strategy is centered around leveraging
Axiata's strengths to drive growth, efficiency, and market leadership in the Bangladeshi
telecommunications market through a combination of organic expansion, strategic
acquisitions/partnerships, operational excellence, and a customer-centric approach.

Robi Axiata Limited in Bangladesh does not appear to have significantly diversified its operations
into different related or unrelated industries. The company's core business remains in the
telecommunications sector as a mobile network operator. The key points are:

1. Robi Axiata Limited is the second largest mobile network operator in Bangladesh, with a
focus on providing mobile services and related telecommunications products and services.

27
 2. The company was formerly known as Telekom Malaysia International (Bangladesh) and
was rebranded as Robi in 2010. This suggests its core business has remained in the
telecommunications industry.

3. Robi Axiata is not diversifying into any other industries beyond its core mobile network
operations. The company seems to be focused on growing its presence and market share
within the telecommunications sector in Bangladesh.

4. The Milken Institute report discusses the need for industrial diversification in Bangladesh,
but does not provide any specific examples of Robi Axiata expanding into other industries.

5. Robi Axiata Limited is a specialized mobile network operator and has not significantly
diversified its business operations beyond its core telecommunications activities in
Bangladesh.

In summary, Robi Axiata Limited has not diversified its operations into different related or
unrelated industries. The company appears to be focused on its core mobile network business in
the Bangladeshi telecommunications market.

The different Strategic Business Units (SBUs) of Robi Axiata Limited are as follows:
Mobile Telecommunications: This SBU focuses on providing mobile network services to
customers in Bangladesh, including voice, data, and value-added services.

AxEnTec PLC: This newly formed subsidiary of Robi Axiata Limited, led by Adil Hossain Noble
as the Managing Director and CEO, is likely to operate in a specific area related to technology,
possibly in the telecommunications sector.

The core operations of Robi Axiata Limited in Bangladesh can be summarized as follows:
• Robi is the second largest mobile network operator in Bangladesh, with a focus on continued
organic growth and selective acquisitions/partnerships to grow its market share.

• Robi's core business is providing telecommunications services, including mobile voice, data, and
digital services to customers in Bangladesh.

• Key elements of Robi's operations include:

28
 1. Developing and maintaining a robust mobile network infrastructure across Bangladesh.
2. Offering a wide range of digital services and platforms, such as bdapps (national app store),
Binge (video streaming), Robi My Sports, Robi VTS (vehicle tracking), and others.
3. Providing innovative products and services to address the evolving needs of customers in
Bangladesh.
4. Strengthening its sales and distribution channels, including direct dealers and its own sales
force.
5. Attracting and retaining a high-quality workforce to drive operational excellence.

• Robi also has a strong focus on corporate social responsibility initiatives, such as the Robi-10
Minute School digital education platform, providing safe drinking water at railway stations, and
the #CommonSense awareness campaign.

In summary, Robi's core operations center around being the leading telecommunications service
provider in Bangladesh through continuous network improvements, digital innovation, customer-
centric strategies, and operational excellence - all while contributing to social development
initiatives in the country.

Based on the financial information, the key percentages of Robi Axiata Limited's assets and
revenue are:

Assets:
✓ As of September 30, 2023, Robi's total assets were BDT 216,985.07 million.
Revenue:
✓ For the 9 months ended September 30, 2023, Robi's total revenue was BDT
74,310.78 million.
✓ For the full year 2021, Robi's total revenue was BDT 81,420 million.

Therefore, the key percentages are:

• Percentage of assets to total assets:
✓ Robi's total assets of BDT 216,985.07 million represent 100% of its total assets as
of September 30, 2023.

29
• Percentage of revenue to total revenue:
✓ Robi's revenue of BDT 74,310.78 million for the 9 months ended September 30,
2023 represents approximately 91.3% of its total revenue for the full year 2021
(BDT 81,420 million).

In summary, Robi Axiata Limited's total assets of BDT 216,985.07 million represent 100% of its
total assets, while its revenue of BDT 74,310.78 million for the 9 months ended September 30,
2023 represents approximately 91.3% of its total revenue for the full year 2021.

30
 Financial Analysis (Robi Axiata Limited)

Business Performance
restated restated
IN BDT'000 2015 2016 2017 2018 2019 2020 2021 2022
Assets 112235007 133422194 142101150 144614084 171968640 199464858 207594366 197274601
Growth of Assets - 19% 7% 2% 19% 16% 4% -5%
Revenue 52394776 51131424 68255508 67982295 74811748 75642696 81424640 85859740
Growth of Revenue - -2% 33% 0% 10% 1% 8% 5%
No. of employees N/A

Note: Data of No of employees and Revenue per Employees were not available in the Annual report.

The aforementioned table illustrates how Robi Axiata Limited's total assets increased gradually
from 2015 to 2021 before slightly declining in 2022. Additionally, the rates at which assets expand
vary throughout time: The years with the highest growth rates, 19% in 2016 and 19% in 2019,
showed notable expansion. In 2022, asset growth was noticeably lower than in previous years (-
5%), which might indicate a contraction or a strategic change in asset management. The company's
asset accumulation has generally shown a favorable trend, suggesting room for investment and
future company growth.

Robi Axiata Limited’s revenue shows a mixed trend over the years with fluctuations in growth
rates. Revenue decreased in 2016 (-2%), but significantly increased in 2017 (33%), indicating a
strong performance. Besides, revenue growth remained relatively stable in subsequent years, with
moderate increases or stagnation. In 2022, revenue growth slightly decreased to 5%, suggesting
continued but slower growth compared to previous years. Overall, despite fluctuations, revenue
has generally trended upwards, indicating business expansion and revenue generation capacity.

Robi Axiata Limited has proven throughout the years to be resilient by expanding in both revenue
generation and asset accumulation. Revenue growth has been comparatively steady, despite
considerable variation in growth rates, but asset growth has seen ups and downs. The decline in
asset growth and marginal decline in revenue growth in 2022 might necessitate a closer look at the
variables influencing these patterns. Despite difficulties, the business's performance points to

31
 general stability and the possibility of further expansion; nonetheless, strategic changes might be
required to deal with emerging challenges or capitalize on possibilities.

Liquidity Position

IN BDT'000 2015 2016 2017 2018 2019 2020 2021 2022

Current Assets 9804520 14026859 16802126 14393581 17621535 19536739 15635500 14270357
Current Liabilities 39312482 57796848 71733278 68326279 69972952 73800355 76302663 69498669
Inventories 87555 132512 210834 282680 244409 155881 350814 503914
Cash & Cash Equivalents 1943292 4014316 1725366 2997219 4517026 9469879 4918491 3563406
Operating Cash Flow 16134349 12332338 14235902 22064557 28760432 25458453 32560580 37274521
Current Ratio 0.2494 0.2427 0.2342 0.2107 0.2518 0.2647 0.2049 0.2053
Quick Ratio 0.2472 0.2404 0.2313 0.2065 0.2483 0.2626 0.2003 0.1981
Cash Ratio 0.0494 0.0695 0.0241 0.0439 0.0646 0.1283 0.0645 0.0513
Operating Cash Flow Ratio 0.4104 0.2134 0.1985 0.3229 0.4110 0.3450 0.4267 0.5363

The current ratio measures the company's ability to meet short-term liabilities with its short-term
assets. A higher current ratio indicates better liquidity and a stronger ability to cover short-term
obligations. Robi Axiata Limited's current ratio has fluctuated over the years but generally
remained below 1, indicating that its current liabilities exceed its current assets. This may suggest
some degree of liquidity risk or reliance on other sources to meet short-term obligations.

The quick ratio (or acid-test ratio) is a more stringent measure of liquidity that excludes inventory
from current assets. Similar to the current ratio, a higher quick ratio signifies better liquidity and a
stronger ability to cover short-term liabilities. Robi Axiata Limited's quick ratio also remained
consistently below 1 over the years, indicating potential difficulty in meeting short-term
obligations without relying on inventory. This suggests a liquidity position that may require
attention and management.

The cash ratio is the most conservative liquidity ratio, focusing solely on cash and cash equivalents
to cover short-term liabilities. A higher cash ratio implies a stronger ability to cover short-term
obligations with readily available cash. Robi Axiata Limited's cash ratio has varied over the years
but generally remained low, indicating a reliance on other assets besides cash to meet short-term
obligations. However, the company has shown some improvement in its cash ratio from 2015 to
2020.

32
 The operating cash flow ratio measures the company's ability to cover short-term liabilities with
operating cash flow. A higher operating cash flow ratio suggests a stronger ability to generate
sufficient cash from operations to meet short-term obligations. Robi Axiata Limited's operating
cash flow ratio has fluctuated over the years but generally remained above 0.2, indicating a
relatively strong ability to cover short-term liabilities with operating cash flow.

Robi Axiata Limited's liquidity position appears to have improved slightly in recent years, as
evidenced by the increasing trend in the operating cash flow ratio and a relatively stable cash ratio.
However, the company's current and quick ratios consistently below 1 suggest a potential liquidity
risk, indicating a need for careful management of short-term obligations and working capital.

Assets Efficiency Position

IN BDT'000 2015 2016 2017 2018 2019 2020 2021 2022

Net Sales 52394776 51131424 68255508 67982295 74811748 75642696 81424640 85859740
Average Total Assets 112235007 133422194 142101150 144614084 171968640 199464858 207594366 197274601
Cost of Goods Sold 30556037 45566581 52829469 48063015 46973632 47358401 53988125 53623042
Average Inventory 87555 132512 210834 282680 244409 155881 350814 503914
Net Credit Sales N/A
Average Accounts Receivable 4979305 8088082 9743805 7121048 7932397 7365644 8146611 7383411
Average Fixed Assets 102430487 119395335 125299024 130220495 171968640 179928119 191958866 183004244
Asset Turnover Ratio 0.4668 0.3832 0.4803 0.4701 0.4350 0.3792 0.3922 0.4352
Inventory Turnover Ratio 348.9925 343.8676 250.5738 170.0262 192.1927 303.8112 153.8939 106.4131
Receivables Turnover Ratio N/A
Fixed Asset Turnover Ratio 0.5115 0.4283 0.5447 0.5221 0.4350 0.4204 0.4242 0.4692

Note: Percentage of postpaid & prepaid cardholders were not available. Therefore, Net credit sales & Receivables
turnover ratio is not available.

The asset turnover ratio calculates the effectiveness with which the business generates sales from
all of its assets. The asset turnover ratio of Robi Axiata Limited varies over time, however it
typically ranges from 0.4 to 0.5. Better asset utilization, or more income generated per unit of
assets, is indicated by a greater asset turnover ratio. The pattern indicates that Robi Axiata Limited
has used its resources to produce sales quite successfully, despite periodic oscillations that point
to different levels of efficiency.

The inventory turnover ratio compares the cost of goods sold (COGS) to the average inventory
over a given time period to determine how well the business is managing its inventory. The

33
 inventory turnover ratio of Robi Axiata Limited has varied significantly over time, from roughly
100 to over 300. An increased inventory turnover ratio means that the business is selling its stock
more frequently, which could be a sign of effective inventory control. On the other hand, a very
high inventory turnover ratio may also be a sign of low inventory levels, which, if not handled
carefully, could result in stockouts or possibly missed sales.

The fixed asset turnover ratio calculates the effectiveness with which the business generates sales
from its fixed assets, which include property, plant, and equipment. The fixed asset turnover ratio
of Robi Axiata Limited varies over time as well, but it generally follows the same pattern as the
asset turnover ratio, ranging from 0.4 to 0.5. A greater fixed asset turnover ratio suggests that fixed
assets are being used more effectively to produce income. Despite fluctuations in efficiency over
time, the trend points to Robi Axiata Limited as being rather successful in generating sales through
the use of its fixed assets.

The asset turnover ratio, inventory turnover ratio, and fixed asset turnover ratio all show that Robi
Axiata Limited has moderate to good asset efficiency. Although these ratios have fluctuated over
time, the company has generally demonstrated a respectable level of asset utilization and inventory
management efficiency in order to drive sales.

Solvency Position

IN BDT'000 2015 2016 2017 2018 2019 2020 2021 2022

Total Debt 6780612 13344497 11234034 16113300 14059436 12793205 9781877 13654186
Total Equity 54890111 58677206 58670822 60591633 59588895 65956131 66207563 67126541
Total Assets 112235007 133422194 142101150 144614084 171968640 199464858 207594366 197274601
EBIT 7315746 -9432666 -2571695 2679662 3789007 5508606 4962113 4627715
Interest Expense 720603 984744 1366371 3023495 5137205 4958733 4110475 5937642
Debt-to-Equity Ratio 0.1235307 0.22742216 0.1914757 0.26593276 0.2359405 0.19396536 0.1477456 0.2034096
Debt Ratio 0.0604144 0.10001707 0.0790566 0.11142276 0.0817558 0.06413764 0.0471201 0.0692141
Interest Coverage Ratio 10.152256 -9.5788002 -1.8821352 0.88627962 0.737562 1.11088982 1.2071872 0.779386

Debt to Equity Ratio indicates the proportion of debt financing relative to equity financing. A
lower ratio suggests lower financial risk. The trend shows fluctuations over the years but generally

34
 remains below 1, which indicates that the company relies more on equity financing than debt
financing. This is a positive sign for solvency.

Debt Ratio represents the proportion of a company's assets that are financed by debt. Again, a
lower ratio typically indicates lower financial risk. The debt ratio also fluctuates but remains
relatively low, indicating that the company's assets are primarily financed through equity. Again,
this is favorable for solvency. The trend shows fluctuation but seems to have a decreasing trend
recently, which could indicate an improving solvency position

Interest Coverage Ratio measures a company's ability to cover its interest expenses with its
operating income. A higher ratio implies a better ability to meet interest obligations. The trend
shows some volatility, with some years showing ratios below 1, indicating that the company's
operating income may not be sufficient to cover its interest expenses during those years. However,
in recent years, the ratio has improved, suggesting better ability to cover interest expenses.

Overall, based on the provided ratios, Robi Axiata Limited appears to have a relatively stable
solvency position, with a tendency towards lower debt levels and improving interest coverage in
recent years. However, it's essential to consider other factors such as industry norms, market
conditions, and company-specific circumstances for a comprehensive assessment of solvency.

Debt Repayment Position

IN BDT'000 2015 2016 2017 2018 2019 2020 2021 2022

Total Debt 6780612 13344497 11234034 16113300 14059436 12793205 9781877 13654186
Total Equity 54890111 58677206 58670822 60591633 59588895 65956131 66207563 67126541
EBIT 7315746 -9432666 -2571695 2679662 3789007 5508606 4962113 4627715
Interest Expense 720603 984744 1366371 3023495 5137205 4958733 4110475 5937642
Operating Cash Flow 16134349 12332338 14235902 22064557 28760432 25458453 32560580 37274521
Capital Expenditures 26099234 20299731 20514980 23418818 13480013 21184349 23940283 28437012
Debt-to-Equity Ratio 0.1235307 0.22742216 0.1914757 0.26593276 0.2359405 0.19396536 0.1477456 0.2034096
Interest Coverage Ratio 10.152256 -9.5788002 -1.8821352 0.88627962 0.737562 1.11088982 1.2071872 0.779386
Free Cash Flow -9964885 -7967393 -6279078 -1354261 15280419 4274104 8620297 8837509

35
Debt to Equity Ratio indicates the proportion of debt financing relative to equity financing. A
higher ratio suggests higher financial risk. The trend of the Debt to Equity Ratio shows fluctuations
over the years but remains relatively stable. It's below 1 for most years, indicating that the company
relies more on equity financing than debt financing. This suggests a lower financial risk regarding
debt repayment.

Interest Coverage Ratio measures a company's ability to cover its interest expenses with its
operating income. A higher ratio implies a better ability to meet interest obligations. The Interest
Coverage Ratio also fluctuates but generally shows an improving trend over the years. In recent
years, it has been above 1, indicating the company's operating income is sufficient to cover its
interest expenses. This is a positive sign for debt repayment capacity.

Free Cash Flow represents the cash generated by the company after accounting for capital
expenditures. Positive free cash flow indicates the company has enough cash to cover debt
obligations. The Free Cash Flow has been positive for the past few years, indicating that the
company generates enough cash to cover its debt obligations and possibly invest in growth
opportunities. This further strengthens the debt repayment position.

Overall, based on the provided ratios, Robi Axiata Limited appears to have a reasonable debt
repayment position. However, it's essential to consider other factors such as the company's overall
financial health, market conditions, and future cash flow projections for a comprehensive
assessment.

Credit Rating
Entity Rating AA2
Long Term Loan Rating AA2(Lr)
Short Term Loan Rating ST-1
Rating Outlook Stable

Entity Rating (AA2): Robi Axiata Limited has a very good capacity to satisfy its financial
obligations, as indicated by its entity rating of AA2. It implies that there is extremely little credit
risk associated with long-term commitments like bonds or other debt instruments.

36
 Long Term Loan Rating (AA2(Lr)): This rating provides additional evidence of the company's
strong creditworthiness for extended loans. It implies that lenders are quite confident in Robi
Axiata Limited's capacity to fulfill its long-term loan commitments.

Short Term Loan Rating (ST-1): This is the highest grade for the ability to repay short-term debt.
It suggests that Robi Axiata Limited is better able to pay back short-term loan commitments on
time, frequently in less than a year.

Rating Outlook (Stable): This indicates that the credit rating agency anticipates that the company's
creditworthiness will not change significantly in the foreseeable future. It means that, for the
foreseeable future, no material circumstances are expected to have an impact on the company's
capacity to pay its debts.

Overall, based on these credit ratings, Robi Axiata Limited has a strong debt repayment position.
The ratings suggest that the company is highly likely to honor its debt obligations, both in the short
term and long term, with a very low risk of default.

Profitability Position

IN BDT'000 2015 2016 2017 2018 2019 2020 2021 2022

Net Profit 4003777 -6931073 -6383 2093361 256385 1129307 1822812 1966565
Revenue 52394776 51131424 68255508 67982295 74811748 75642696 81424640 85859740
Gross Profit 21838739 5564843 15426039 19919280 27838116 28284295 27436515 32236698
Operating Profit 7220192 -8555358 -2815597 -616061 8658856 10526025 9254664 13512482
Average Total Assets 112235007 133422194 142101150 144614084 171968640 199464858 207594366 197274601
Shareholder's Equity 54890111 58677206 58670822 60591633 59588895 65956131 66207563 67126541
Common Shares Outstanding 3535605 3684133 4714140 4714140 4714140 4745741 5237933 5237933
Net Profit Margin 7.64% -13.56% -0.01% 3.08% 0.34% 1.49% 2.24% 2.29%
Gross Profit Margin 41.68% 10.88% 22.60% 29.30% 37.21% 37.39% 33.70% 37.55%
Operating Profit Margin 13.78% -16.73% -4.13% -0.91% 11.57% 13.92% 11.37% 15.74%
Return on Assets 3.57% -5.19% 0.00% 1.45% 0.15% 0.57% 0.88% 1.00%
Return on Equity 7.29% -11.81% -0.01% 3.45% 0.43% 1.71% 2.75% 2.93%
Earnings Per Share 0.91 -1.88 -0.02 0.46 0.04 0.33 0.34 0.35

Net Profit Margin indicates the percentage of each dollar of revenue that results in net profit after
all expenses are deducted. A higher percentage indicates better profitability. The trend shows
improvement over the years, with positive margins from 2015 to 2022. This suggests that the

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company is becoming more efficient in managing its expenses and generating profit from its
revenue

Gross Profit Margin represents the percentage of revenue that exceeds the cost of goods sold. It
measures the profitability of a company's core business activities. The gross profit margin also
shows an improving trend, indicating better control over the cost of goods sold and potentially
more efficient operations.

Operating Profit Margin shows the proportion of revenue that remains after deducting operating
expenses. It reflects the efficiency of the company's operations in generating profits. Similar to the
net profit margin, the operating profit margin has improved over the years, suggesting better
control over operating expenses and more efficient operations.

Return on Assets (ROA) measures how effectively the company is utilizing its assets to generate
profit. A higher ROA indicates better profitability relative to its asset base. The ROA has also
shown improvement, indicating that the company is generating more profit relative to its asset base

Return on Equity (ROE) evaluates the company's ability to generate profit from shareholders'
equity. It indicates how much profit the company generates with the money shareholders have
invested. The ROE has improved over the years, suggesting better utilization of shareholders'
equity to generate profits.

Earnings Per Share (EPS): This ratio represents the portion of a company's profit allocated to each
outstanding share of common stock. It's an indicator of the company's profitability on a per-share
basis. The EPS has shown a positive trend, indicating that the company's profitability on a per-
share basis has been increasing.

Overall, based on the provided ratios, the profitability position of Robi Axiata Limited appears to
be improving, indicating effective management of expenses and operations to generate profits over
the years

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 Stock Market Performance

2021 2022
Market Capitalization 225754912 165256786
Earnings Performance
(EPS) 0.34 0.35
Revenue Growth 8% 5%

Stock Price Analysis

Monthly Closing
Date Share Price
2/1/2021 43.90
3/1/2021 44.30
4/1/2021 45.30
5/1/2021 47.70
6/1/2021 44.00
7/1/2021 43.00
8/1/2021 42.70
9/1/2021 41.20
10/1/2021 40.10
11/1/2021 38.00
12/1/2021 34.60
1/1/2022 37.50
2/1/2022 35.60
3/1/2022 33.60
4/1/2022 32.40
5/1/2022 29.40
6/1/2022 30.10
7/1/2022 30.00
8/1/2022 30.00
9/1/2022 30.00
10/1/2022 30.00
11/1/2022 30.00
12/1/2022 30.00

A reduction in the company's stock market valuation is indicated by the market capitalization's dip
from 2021 to 2022. Numerous factors, like shifts in investor mood, business performance, or
general market conditions, may have an impact on this.

The improvement in profitability per share as indicated by the growth in EPS from 2021 to 2022.
Given that the company is making more money than the number of outstanding shares, this could
be encouraging news for investors.

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The corporation saw positive revenue growth in both 2021 and 2022, despite a decline in the
revenue growth rate. Investors may become concerned about the company's capacity to maintain
its revenue pace, nevertheless, given the slowing growth rate.

Throughout the time, there were notable swings in the stock price in reaction to a range of internal
and external variables. Beginning in July 2022, the stock price stabilized at $30.00, which could
indicate a time of relative stability or investor confidence in the company's direction.

Overall, a variety of elements, such as shifts in market capitalization, earnings per share (EPS),
revenue growth, and stock price movements, are reflected in Robi Axiata Limited's stock market
performance. To make well-informed judgments on their investments in the company, investors
can examine these measures in further detail in conjunction with other pertinent data.

Monthly Closing Share Price

60.00

50.00

40.00

30.00

20.00

10.00

0.00
9/26/2020 1/4/2021 4/14/20217/23/202110/31/20212/8/2022 5/19/20228/27/202212/5/20223/15/2023

Figure: Graph showing the monthly closing share price of Robi Axiata Limited

The historical trend of the closing share price of Robi Axiata Limited from January 2021 to
December 2022 shows fluctuations and trends that can be analyzed:

• First Growth (January 2021–May 2021): In January 2021, the share price was 43.90. By
May 2021, it had risen to 47.70. Positive investor sentiment or corporate performance
during this time frame is reflected in the rising trend that has persisted.

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 • Decline (May 2021 - December 2021): The share price started to drop in May 2021 and by
December 2021, it had dropped to 34.60. This drop could be caused by a number of things,
including a correction in the market, difficulties unique to the industry, or internal business
problems.
• Stabilization (January 2022–June 2022): From January 2022 to June 2022, the share price
experienced some degree of stabilization, moving between 30.00 and 35.60. This
stabilization may signify a period of market equilibrium following the preceding collapse, or
it may suggest a consolidation period.
• Period of Flatness (July 2022–December 2022): The share price showed little to no
fluctuation starting in July 2022 and stayed comparatively stable around 30.00. This time of
inactivity may indicate that there hasn't been any noteworthy news or changes affecting the
company, which has caused investor apathy.

Overall, the closing share price of Robi Axiata Limited has historically shown a combination of
growth, decline, stabilization, and flat periods.

Calculation of Enterprise Value (EV) of the company

• When did the company listed in the stock market?
Answer: Robi Axiata Limited is a public limited company in which the general public owns 10%
of the shares, Bharti Airtel of India owns 28.18%, and Axiata Group Berhad of Malaysia owns the
rest 61.82%. The firm launched its largest-ever initial public offering (IPO) on December 24, 2020,
in the nation's twin stock marketplaces of Dhaka and Chattogram.

• What is the dividend declaration pattern of the company for last 10 years?
Answer: The Company will endeavor to gradually increase the payout ratio over time and will pay
dividends equal to at least 50% of its PATAMI. A number of factors will be taken into account,
such as the Company's cash flow position, business prospects, capital requirements and surplus,
growth and expansion strategy, non-recurring item considerations, current laws and regulations,
and other relevant factors deemed by the Board.

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42
Step 1(Average Free Cash Flow for Square Pharmaceuticals has been calculated): Free cash
flow, also referred to as FCF, is the amount of money a company is left with after paying its capital
and operating expenses. Furthermore, a company with higher free cash flow (FCF) can allocate a

43
larger portion of its available funds to dividend payments, debt reduction, and expansion
opportunities. FCF is also a metric that helps to assess the financial health of a company. In this
case, Robi Axiata Limited has a positive average cash flow of Tk. 1430839000.

Step 2: Assuming the growth rate for future cash flow (ROBI)

Average
Growth
2015 2016 2017 2018 2019 2020 2021 2022 rate
Growth
rate - -20% -21% -78% -1228% -72% 102% 3% -188%

Average
Growth
2019 2020 2021 2022 rate
Growth rate- -72% 102% 3% 11%

The average growth rate of -188% is an unrealistic figure because Robi Axiata
Limited is a mature & large cap firm. Besides, Robi would incurr huge
expenditure for the investment in tower in different locations to give their
consumers 24/7 access to network in Bangladesh.Moreover, the FCF value was
negative till 2018. So, in order to get a reliable growth rate I have calculated
the growth rate based on the data of 2019-2022.

Step 3 (Calculating the Future Cash Flow for the next five years from 2023-2027 for ROBI):
The Future Cash Flow for the year 2027 is TK. 2411047000.

Step 4 (Calculating the terminal value): The terminal value for Robi Axiata Limited has been
calculated using the Future Cash Flow figure from step 3. The Terminal growth rate is assumed to
be 5% and the discounted rate is 10.03% calculated by using the Weighted Average Cost of Capital
(WACC).

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 Step 5

Future Cash Flow Present value

SL. No. Year Growth rate assumed (BDT millions) (BDT millions)
1 2023 11% 1588231.29 1443409.818
2 2024 11% 1762936.732 1456091.079
3 2025 11% 1956859.772 1468883.752
4 2026 11% 2172114.347 1481788.818
5 2027 11% 2411046.926 1494807.262
Net Present Value (NPV) of future free cash flows 7344980.729

Step 6

Present value of the Terminal value 31183343

Step 7

sum of the present values of the cash flows 38528323.67

Step 8

Net Debt = Current Year Total Debt – Cash & Cash Balance

Total Debt (000) 13654186

Cash & Cash balance (000) 3563406

Net Debt 10090780

Total Present Value of Free Cash flow 48619104

Step 9

Intrinsic Value :
Share Price = Total Present Value of Free Cash flow / Total Number of shares

Total Number of shares

(000) 5,237,933

Intrinsic value 9.28

Upper Intrinsic value 10.21

Step 5, 6 & 7: In Step 5, The Net Present Value of future Cash Flow for Robi Axiata Limited has
been calculated. Besides, in step 6 the present value of terminal value has been calculated. Finally,
in step 7 the findings from step 5 and step 6 have been added together.

Step 8: In this step, the Net Debt for Robi Axiata Limited has been calculated and then the net
debt figure has been added with the figure calculated in step 7. The total present value of free cash
flows is Tk. 48619104000.

Step 9: In this step, the intrinsic value has been calculated by dividing the total Present Value of
Free Cash flow with the total Number of shares. The intrinsic value band of Robi Axiata is fairly
valued between Tk. 9.28 and 10.21.

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 Market Price vs Intrinsic Value

TICKER Current Market Value Intrinsic Value UPSIDE Return %

ROBI 30.00 10.21 -19.79 -66%

If the intrinsic value of an asset is lower than its current market price and it is giving an upside of
-19.79, it suggests that the asset is overvalued according to the DCF analysis. In this scenario, the
DCF model indicates that the asset's true worth is less than what the market is currently valuing it
at. The negative upside of -19.79 indicates that the market price is approximately higher than the
estimated intrinsic value. Investors may interpret this as a signal to exercise caution, as the asset
appears to be trading at a premium compared to its fundamental value, potentially indicating an
opportunity for selling or shorting the asset if they believe the market price will eventually revert
towards the intrinsic value. Knowledgeable investors always choose stocks that are perceived as
"undervalued" when their intrinsic worth exceeds their market value.

Limitations of Discounted Cash Flow Model: Although it is frequently employed for investment
assessment, discounted cash flow (DCF) analysis has a few drawbacks. It is mostly dependent on
precise projections of future cash flow, which can be difficult and prone to inaccuracy. The
valuation result is sensitive to input factors, as evidenced by the significant influence that
assumptions about discount rates, terminal values, and other variables might have. Non-financial
aspects like management caliber or regulatory concerns might not be fully captured by DCF
analysis, which could result in incomplete valuations. Furthermore, it might not take behavioral
biases or market dynamics into account because it assumes market efficiency. DCF models are
difficult to construct and require a lot of resources, which limits their usefulness, particularly for
smaller businesses or those with little data.

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ESG impact Analysis

Robi Axiata, a leading mobile network operator in Bangladesh,

has been disclosing its Environmental, Social and Governance
(ESG) performance through annual Sustainability Reports since
2020. The reports cover the company's operations and highlight
its commitment to sustainable development

❖ How do different activities of the company affect the company?

ESG Impact Analysis of ROBI: ESG (Environmental, Social, and Governance) factors can have a
significant impact on Robi Axiata Ltd, the telecommunications company. Here's how ESG
considerations may affect various aspects of Robi Axiata's operations:

1. Environmental Impact:
• Robi Axiata's operations, including the management of network infrastructure and
disposal of electronic waste, can have environmental consequences such as energy
consumption, carbon emissions, and resource depletion.

• Embracing environmentally sustainable practices such as reducing energy

consumption, adopting renewable energy sources, and implementing efficient waste
management strategies can help mitigate the company's environmental impact.

• Failure to address environmental concerns could lead to reputational damage,

regulatory scrutiny, and operational inefficiencies.

2. Social Impact:
• As a major provider of telecommunication services, Robi Axiata plays a vital role in
promoting social inclusion and economic development by facilitating access to
communication and digital services.

47
 • Initiatives aimed at bridging the digital divide, expanding network coverage to
underserved areas, and offering affordable services can contribute to enhancing social
welfare and fostering digital inclusion.

• Ensuring fair labor practices, promoting employee well-being, and engaging with local
communities can strengthen Robi Axiata's social license to operate and enhance its
brand reputation.

3. Governance Practices:
• Strong corporate governance practices are essential for maintaining transparency,
accountability, and ethical conduct within Robi Axiata's operations.

• Upholding governance standards such as board independence, diversity, and effective

risk management can enhance investor confidence, mitigate risks, and support long-
term sustainable growth.

• Embracing responsible business practices, complying with regulatory requirements,

and fostering a culture of integrity and ethical behavior are integral to Robi Axiata's
corporate governance framework.

Overall, integrating ESG considerations into its business strategy and operations can benefit Robi
Axiata by enhancing its competitiveness, mitigating risks, attracting investment, and fostering
long-term value creation. By addressing environmental, social, and governance challenges, Robi
Axiata can strengthen its resilience, reputation, and sustainability in the telecommunications
industry.

Conclusion
To sum up, Robi Bangladesh has become a major force in the telecom sector by providing a variety
of services and creative solutions to cater to its clients' changing needs. Robi's robust network
coverage has made it possible for millions of individuals in Bangladesh to stay connected and use
digital services. The business has significantly changed the telecoms landscape, spurring economic
growth and altering how people communicate and obtain information. Robi, with its ongoing

48
investments in infrastructure expansion and service quality enhancement, is well-positioned to
significantly influence the trajectory of Bangladesh's telecommunications sector.

49
References:
• Islam, J. (n.d.). A critical analysis on the management practices of Robi. Scribd.
https://www.scribd.com/document/463243601/A-Critical-Analysis-on-the-Management-
Practices-of-Robi
• Bangladesh Bank. (n.d.).
https://www.bb.org.bd/en/index.php/financialactivity/interestlending
• Studocu. (n.d.-b). Fin405 assignment - To accompany your on-the-go lifestyle,
WALTON has introduced a variety of - Studocu.
https://www.studocu.com/row/document/independent-university-bangladesh/corporate-
finance/fin405-assignment-to-accompany-your-on-the-go-lifestyle-walton-has-
introduced-a-variety-of-laptops/26895108
• About Robi. (n.d.). https://www.robi.com.bd/en/corporate
• Integrated Annual Report 2023 by Robi Axiata Limited. Retrieved from:
https://www.robi.com.bd/en/corporate/investor-relations/integrated-annual-report
• Robi Axiata Limited Company Profile. (n.d.).
https://www.robi.com.bd/en/corporate/company-profile
• Shareholding structure. (n.d.). https://www.robi.com.bd/en/corporate/governance-and-
policy/governance/shareholding-structure
• All Annual Reports of Robi Axiata Limited from 2015-2022.
https://drive.google.com/drive/folders/1pzPPLywj4VsDAdbq82bTRVbzmuQr-
AXz?usp=drive_link

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