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Introduction

Bangladesh is a growing market for telecommunication operation business.

Mobile telecommunication operation sector is the big fish among

telecommunication operation business. At present we have six

telecommunication operators in Bangladesh. Within them, most of the

companies are mainly controlled by MNCs.

Grameen phone Limited, widely known as GP, is the leading

telecommunications service provider in Bangladesh. With more than 20

million subscribers, Grameen phone is the largest cellular operator in the

country. It is a joint venture enterprise between Telenor and Grameen Telecom Corporation, a non-profit sister concern of the internationally

acclaimed microfinance organization and community development bank

Grameen Bank. Telenor, the largest telecommunications company in

Norway, owns 55.8% shares of grameen phone, Grameen Telecom owns

34.2% and the remaining 10% owns by public and financial institutions.

Few months back Grameen phone decide to raise capital from the capital

market for repayment of overdraft facilities, network expansion, IT & general

and capital expenditure. So they go for Initial public offering (IPO) for issuing

common stock in the primary market. And enlisted both at DSE and CSE.

In our repot, we will try to describe the process of IPO, that grameen phone

use to raise capital. Like no of share they issue, who was the underwriter,

who was the issue manager, talk about important close of their prospectus

and many others. But our main concern will be to evaluate its IPO

performance in the secondary market. For that we will go week by week

share price analysis, then month by month analysis and at the end a overall

analysis.

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Short Description about Grameen phone Ltd.

The company has so far invested more than BDT 10,700 crore (USD 1.6

billion) to build the network infrastructure since its inception in 1997. It has

invested over BDT 3,100 crore (USD 450 million) during the first three

quarters of 2007 while BDT 2,100 crore (USD 310 million) was invested in

2006 alone. Grameen phone is also one the largest taxpayers in the country,

having contributed nearly BDT 7000 crore in direct and indirect taxes to the

Government Exchequer over the years. Of this amount, over BDT 2000 crore

was paid in 2006 alone.

Since its inception in March 1997, Grameen phone has built the largest

cellular network in the country with over 10,000 base stations in more than

5700 locations. Presently, nearly 98 percent of the country's population is

within the coverage area of the Grameen phone network.

Grameen phone was also the first operator to introduce the pre-paid service

in September 1999. It established the first 24-hour Call Center, introduced

value-added services such as VMS, SMS, fax and data transmission services,

international roaming service, WAP, SMS-based push-pull services, EDGE,

personal ring back tone and many other products and services.

The entire Grameen phone network is also EDGE/GPRS enabled, allowing

access to high-speed Internet and data services from anywhere within the

coverage area. There are currently nearly 3 million EDGE/GPRS users in the

Grameen phone network.

Grameen phone nearly doubled its subscriber base during the initial years

while the growth was much faster during the later years. It ended the

inaugural year with 18,000 customers, 30,000 by the end of 1998, 60,000 in

1999, 193,000 in 2000, 471,000 in 2001, 775,000 in 2002, 1.16 million in

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2003, 2.4 million in 2004, 5.5 million in 2005, 11.3 million in 2006, and it

ended 2007 with 16.5 million customers.

From the very beginning, Grameen phone placed emphasis on providing

good after-sales services. In recent years, the focus has been to provide

after-sales within a short distance from where the customers live. There are

now more than 600 GP Service Desks across the country covering nearly all

upazilas of 61 districts. In addition, there are 72 Grameen phone Centers in

all the divisional cities.

GP has generated direct and indirect employment for a large number of

people over the years. The company presently has more than 5,000 full

and temporary employees. Another 100,000 people are directly dependent

on Grameen phone for their livelihood, working for the Grameen phone

dealers, retailers, scratch card outlets, suppliers, vendors, contractors and

others.

In addition, the Village Phone Program, also started in 1997, provides a good

income-earning opportunity to more than 210,000 mostly women Village

Phone operators living in rural areas. The Village Phone Program is a unique

initiative to provide universal access to telecommunications service in

remote, rural areas. Administered by Grameen Telecom Corporation, it

enables rural people who normally cannot afford to own a telephone to avail

the service while providing the VP operators an opportunity to earn a living.

The Village Phone initiative was given the "GSM in the Community" award at

the global GSM Congress held in Cannes, France in February 2000. Grameen

phone was also adjudged the Best Joint Venture Enterprise of the Year at the

Bangladesh Business Awards in 2002. Grameen phone was presented with

the GSM Association's Global Mobile Award for Best use of Mobile for Social

and Economic Development' at the 3GSM World Congress held in Singapore,

in October 2006, for its Community Information Center (CIC) project, and for

its Health Line Service project at the 3GSM World Congress held in

Barcelona, Spain, in February 2007.

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Grameen phone considers its employees to be one of its most important

assets. GP has an extensive employee benefit scheme in place including

Gratuity, Provident Fund, Group Insurance, Family Health Insurance,

Transportation Facility, Day Care Centre, Children's Education Support,

Higher Education Support for employees, in-house medical support and other

initiatives.

What was the Process For IPO of Grameen

phone Ltd:

Grameen phone Ltd. Have issued 69,439,400 ordinary shares at taka 10.00

each at an issue price of taka 70.00 per share, including a premium of taka

60.00 per share, totaling taka 4,860,758,000. Issue manager for the IPO was

Citigroup Global Markets Bangladesh Privet Limited. Underwriters for the IPO

was Citigroup Global Markets Bangladesh Privet Limited, IFIC Bank Limited,

Eastern Bank Limited, The City Bank limited, Green Delta insurance Limited

Co. Ltd., Trust Bank Limited, IDLC Finance Limited. Sixteen banks perform as

bankers to the issue of IPO shares. Among them there was IFIC Bank Limited,

Eastern Bank Limited, The City Bank limited, Trust Bank Limited, One Bank

limited, Standard Chartered Bank, BRAC bank Ltd., and many others. The

companies have credit rating on the time of IPO AAA for the long term And

ST-1 for the short term. It was rated by Credit Rating Agency of Bangladesh.

Grameen phone got SEC consent on august 24, 2009. After that they issue

their prospectus on august 26, 2009. Opening date of subscription was

October 4, 2009 and closing date for subscription was October 8, 2009. For

NBRs these dates were October 4 and October 18 respectively. After that

they use lottery to select share holders. Market trade lot of the share was

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200. The listing date of the company both DSE and CSE was November 11,

2009. And the first trading date of the company was November 16, 2009.

Some Important Data about GP IPONature of Business Grameen phone Ltd. is the largest mobile

telecommunications operator in Bangladesh

Subscription Open 4-Oct-09

Subscription Close 8-Oct-09

For Nonresident

Bangladeshi

October 4, 2009 to October 18, 2009

Listing Date 11-Nov-09

Trading Date 16-Nov-09

Offer Price (Tk.) 70

Face Value (Tk.) 10

Market lot (Share) 200

Sponsors Portion

(Share)

1,215,174,797

Sponsors Portion

(Tk.)

12,151,747,970.00

Public Offering :

IPO (Shares) 69,439,400

Private Placement

(shares)

65,685,800

Post IPO Paid-up

capital

Tk. 13,502,999,970.00

Reason for IPO: Repayment of overdraft facilities, Network

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expansion, IT & General and Capital

expenditure.

Earnings per share as

on 31.12.08 (as per

prospectus)

Tk.2.46 (considering face value of Tk. 10.00)

NAV per share (as per

prospectus)

Tk.22.70

Manager to the Issue Citigroup Global Markets Bangladesh Private

Limited

Website www.grameenphone.com

Week Wise Analysis of Share Price:

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

16.11.2009

195 160 177.3 7430400

17.11.2009

186 170.1 171.1 2832800

18.11.2009

170.2 158 158.2 2732000

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19.11.2009

167.9 152 164 1627200

For the first week, the share was traded for four days. The highest price of

the week was Tk. 195 and the lowest price of the week Tk. 152. The closing

share price goes down all through the week except the last day. If we look at

the no. of share traded then we see that it decrease a lot all though the

week. So there was a lot of supply of share but fewer buyer. Thats why

share price may be goes down. But at the last day when price already goes

down, then supply of share may be goes down thats why share price goes

up.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

22.11.2009

168.9 163 165.7 872400

23.11.2009

170 164.1 168.5 1091600

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24.11.2009

177 168.8 174.8 1321800

25.11.2009

180 175.9 179.3 1232000

26.11.20

09

182 178 180 1126800

For this week, the share was traded for all five days. The highest price of the

week was Tk. 182 and the lowest price of the week Tk. 163. So this week in

term of lowest price, this shares price improves a lot than last week. Now if

you look at the closing share price then it improved a lot all through week.

And the no. of share traded improves a lot. From the figures on trade it may

be say that may be demand was higher that the supply of the share of thecompany. So share price goes up.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

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DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

6.12.2009

176 171.5 171.8 796200

7.12.200

9

173.8 170 170.1 752800

8.12.2009

171.2 168.6 169.49 555000

9.12.2009

173.9 169 170.7 718200

10.12.2009

172 167.8 169.2 924400

For this week, the share was traded for all five days. The highest price of theweek was Tk. 176 and the lowest price of the week Tk. 167.8. So this week in

term of highest and lowest price, this shares price decrease a lot than last

week. Now if you look at the closing share price then it goes down all

through the week. But it doesnt go down too much. And the no. of share

traded also goes down. So it may be sat that the supply and demand was the

reason behind this.

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DATE Highest

Price

Lowest

Price

Closing

Price

No. of Share

Traded13.12.2009

173 168 171.6 813600

14.12.2009

178.2 172 176 1002600

15.12.2009

179 172.3 172.8 745000

17.12.2009

174 170.5 171.1 424400

This week share was traded for four days. Highest price for the weak was tk.

179 and the lowest price of the share was tk. 168. The closing daily price

increases a lot at the second day but began to fall thereafter. On the second

day no. of share traded was really high may be demand was really high

thats why may the share price become so high that day. High price may be

influenced many share holder to sell the share thats why share price goes

down after that day.

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DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

20.12.2009

171.9 170 170.1 626400

21.12.2009

171.9 169.7 170.8 550000

22.12.20

09

178 171 176.7 1074600

23.12.2009

181.4 177 180.2 1776600

24.12.2009

183.8 179.4 182.5 1584200

This week share was traded for all five days. The highest price of the week

was 183.8 and the lowest price of the week was 169.7. the spread between

the highest and the lowest price of the week become large than last week so

the price fluctuate too much this week. But closing prices of this week goes

up as the week progresses. But figures of no. of share traded was really hard

too relate with the closing price.

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DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

27.12.20

09

190 183.5 189.7 1863600

29.12.2009

194.9 188.2 188.6 1420400

30.12.2009

190 186.4 187.5 1442400

This week share was traded for just three days. Highest price of the share

was tk. 194.9 and lowest price of the share was tk. 183.5. both the highest

and lowest price improves lot in this week. Same effect has been seen overthe daily closing price. But it decreases all through the week. No. of share

traded also increased than last week. But it also fall down with the price as

the week progress. It may be happen because of last weeks trend of price

increase. May be at the beginning of the week demand of share was too high

and supply increase a lot because of high demand, so share price increase

and then goes down.

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DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

3.1.2010

192.3 187 189.3 962200

4.1.2010

198.9 190 197.9 2749600

5.1.2010

202 195.2 196.5 2061800

6.1.2010

197.8 195 196.4 1436200

7.1.2010

197 193.5 193.8 1259600

This week share has been traded for five days. The movement of price in this

week was too high. Highest price of this week was tk. 202 and the lowest

price was tk. 187. So in terms of highest and lowest price market improves a

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lot than last week. But the closing share price and no. of share traded

fluctuate a lot in this week.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

10.1.2010

197.4 190.2 192.3 1605400

11.1.2010

197.4 192.8 196.8 1784800

12.1.2010

207 197.4 206 5308600

13.1.20

10

209 197.6 201.2 2952200

14.1.2010

213.9 203 211.7 3507000

This week share was traded for five days. Highest price of the week was tk.

213.9 and the lowest price was tk. 190.2. Again the highest and lowest price

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improves lot. This week share price was not that much fluctuating like last

week, more or less it increased this week. No. of share traded increased a lot

this week but figures fluctuate a lot this week.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

17.1.2010

215 210.2 211 3133200

18.1.2010

219.9 209.2 219.5 3351800

20.1.2010

227.9 222.5 226.9 2603800

21.1.2010

244.9 227.5 244.4 5070200

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This week share has been traded for four days. Highest price of the week

was tk. 244.9 and the lowest price of the week was tk. 209.2. Highest and

lowest price improves a lot in this week. But the spread between highest and

lowest price become too high. So volatility of the share becomes too much

volatile. But the good thing is that there was an increasing trend in closing

share price. Also in no. of share traded.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

24.1.2010

254.9 236 252.6 3997200

25.1.2010

288 251 278.4 4675000

26.1.2010 275 238.5 255 4564600

27.1.2010

264 250 259 2219400

28.1.2010

275 259 272.1 2761600

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This week share has been traded for five days. Highest price of the week was

tk. 288 and the lowest price of the share was tk. 236. So volatility among

price becomes too much high. It indicates risky trade. Closing price of the

share for each day was too much volatile. And the no. of share traded also

fluctuates a lot all through the week.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

31.1.2010

274.9 265 266.9 2327600

1.2.2010

280 265.2 279.4 3569600

2.2.2010

290 270 286.8 2825600

3.2.2010

300 285.1 287.3 4040200

4.2.2010

296 282.5 290.9 3093600

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This week share has been traded for five days. Highest price was tk. 300 and

the lowest price was tk. 265. So the market of this share is still volatile a lot.

But the closing price increased a lot all through the week. But the no. of

share traded was really volatile.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

7.2.2010

296.9 290 292.6 1584200

8.2.2010

312 294.1 310.6 5377000

9.2.2010

324.9 297 319.6 5672800

10.2.2010

323 310 314 1622400

11.2.2010

316.1 300.1 312 1972400

This week share has been traded for five days. The highest price of the week

was tk. 324.9 and the lowest price of the week was tk. 290. So difference

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between highest and lowest price become little bit smaller this week. But the

closing price increased for first three days but for last two days it decreased

lot. But no. of share traded fluctuates a lot in this week.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

14.2.2010

337.5 308.8 333.9 1916000

15.2.2010

352.8 336 344.3 2624000

16.2.2010

365 342.2 360.4 1959800

17.2.2010

395 364.5 385.4 2973800

18.2.2010

380.1 350 361.2 2612400

This week share has been traded for five days. Highest price was tk. 395 and

the lowest price was tk. 308.8. So market condition was really risky for this

week. That why may be the closing market price increased lot the decreased

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at the end of last week. No. of share trade was also very much volatile all

through the week.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

22.2.2010

361 310 332.6 1207400

23.2.2010

345 323.1 341.8 1359800

24.2.2010

368.8 346.9 366.5 1517000

25.2.2010

380 366 369.3 1501000

This week share has been traded for four days. Highest price was tk. 380 and

the lowest price was tk. 310. So market condition was really risky for this

week. That why may be the closing market price increased lot. No. of share

trade was also very much volatile all through the week. Volume of share was

low compare to last week. So people also fill it risky to trade share.

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Month Wise Analysis of Share Price:

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

16.11.2009

195 160 177.3 7430400

17.11.2009

186 170.1 171.1 2832800

18.11.2009

170.2 158 158.2 2732000

19.11.2009

167.9 152 164 1627200

22.11.2009

168.9 163 165.7 872400

23.11.2009

170 164.1 168.5 1091600

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24.11.2009

177 168.8 174.8 1321800

25.11.2009

180 175.9 179.3 1232000

26.11.20

09

182 178 180 1126800

This month share has been traded for nine days. The highest price of the

share was 195 and the lowest price of the share was 152. So there is

volatility in the market. Closing share price dont have any particular trend.

But first few days it decreased a lot then turn to increase. No. of share traded

was highest at the first day but later on it fluctuate a lot.

DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

1.12.2009

182.9 177 177.3 1112600

2.12.200

9

177.5 174.2 174.7 921600

3.12.2009

175.4 172.4 173.6 773200

6.12.2009

176 171.5 171.8 796200

7.12.2009

173.8 170 170.1 752800

8.12.2009

171.2 168.6 169.49 555000

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9.12.2009

173.9 169 170.7 718200

10.12.2009

172 167.8 169.2 924400

13.12.20

09

173 168 171.6 813600

14.12.2009

178.2 172 176 1002600

15.12.2009

179 172.3 172.8 745000

17.12.2009

174 170.5 171.1 424400

20.12.2009

171.9 170 170.1 626400

21.12.2009

171.9 169.7 170.8 550000

22.12.2009

178 171 176.7 1074600

23.12.2009

181.4 177 180.2 1776600

24.12.2009

183.8 179.4 182.5 1584200

27.12.2009

190 183.5 189.7 1863600

29.12.2009

194.9 188.2 188.6 1420400

30.12.2009

190 186.4 187.5 1442400

This month share has been traded for twenty days. Highest price of the

month was tk. 194.9 and the lowest price was tk. 167.8. Closing share price

decrease in first few days after that there was no particular trend in closing

share price and after that closing share price turn back and goes up. But no

of share traded was not any kind of trend.

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DATE HighestPrice

LowestPrice

ClosingPrice

No. of ShareTraded

3.1.2010

192.3 187 189.3 962200

4.1.2010

198.9 190 197.9 2749600

5.1.2010

202 195.2 196.5 2061800

6.1.2010

197.8 195 196.4 1436200

7.1.2010 197 193.5 193.8 1259600

10.1.2010

197.4 190.2 192.3 1605400

11.1.2010

197.4 192.8 196.8 1784800

12.1.2010

207 197.4 206 5308600

13.1.2010

209 197.6 201.2 2952200

14.1.20

10

213.9 203 211.7 3507000

17.1.2010

215 210.2 211 3133200

18.1.2010

219.9 209.2 219.5 3351800

20.1.2010

227.9 222.5 226.9 2603800

21.1.2010

244.9 227.5 244.4 5070200

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that in the first two month share price was really volatile. There was no kind

of stability in the market. But as the months are progressed, share price is

going toward stability. But Price earning ratio of the company is also getting

higher. That indicates a high risk in the market of this share price and this

share price movement also affects the overall market index in a significant

amount.