Rain’s valuation takes a hit — but it is still over R16 billion

African Rainbow Capital (ARC) released its financial statements for the year ended 30 June 2021, which revealed that it values Rain at R16.357 billion.

ARC owns a 20.26% stake in Rain, down from 20.7% a year ago. The value of its share in Rain increased from R3.111 billion on 30 June 2020 to R3.314 billion on 30 June 2021.

This increase is a result of a R56 million addition and a fair value gain of R147 million over the year.

ARC said Rain continued to surpass expectations in terms of performance and has managed to sustain its high level of customer growth throughout the reporting period.

“Rain exceeded its subscriber targets in both the 4G and the 5G market,” ARC said.

Rain further continued to progress well on its 5G roll-out. It has expanded its 5G coverage almost six-fold since rolling out the service some 18 months ago.

Rain 5G now covers approximately 3 million households in Pretoria, Johannesburg and Cape Town.

“A key focus area of Rain remains to improve its customer experience, and it continues to make progress in addressing customer queries and complaints,” ARC said.

Over the past 18 months, the business has been experiencing an unprecedented surge in demand for its products and services.

As the business case did not make provision for such rapid and significant growth in customer numbers, it naturally led to some customer challenges being experienced.

These issues were further exacerbated by unprecedented demand for Rain’s products on the fringe of its coverage footprint.

“Rain is striving to improve customer service and communication while continuously expanding its coverage footprint,” ARC said.

Rain also launched a campaign to educate prospective clients who seek to acquire Rain’s service but falls outside of the network footprint.

It said that Rain’s most valuable asset is radio frequency spectrum, and it is planning to grow its spectrum through the planned spectrum auction.

To prepare for this auction, a modest capital raise from Rain’s shareholders is in progress.

This capital is to be used to accelerate the roll-out of the 5G network and to support Rain’s participation in the spectrum auction.

Rain valuation

The table below provides an overview of Rain’s valuation between December 2017 and June 2021.

Rain Valuation by ARC
Date ARC Shareholding in Rain ARC’s Shareholding Value Rain’s Valuation
December 2017 20.0% R1.892 billion R9.460 billion
June 2018 20.0% R2.114 billion R10.570 billion
December 2018 20.0% R2.330 billion R11.650 billion
June 2019 20.6% R2.508 billion R12.175 billion
December 2019 20.7% R2.712 billion R13.101 billion
June 2020 20.7% R3.111 billion R15.029 billion
December 2020 20.37% R3.493 billion R17.148 billion
June 2021 20.26% R3.314 billion R16.357 billion

Now read: Rain launches cheap 5G package — R499 per month

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Rain’s valuation takes a hit — but it is still over R16 billion