Rain hits R25 billion valuation

The valuation of mobile network operator Rain has increased by almost R3 billion over the past year, according to the latest annual results of shareholder African Rainbow Capital Investments (ARCI).

ARCI, where billionaire Patrice Motsepe is a major shareholder and chairman, revealed that it invested a further R160 million in Rain in August 2024, bringing its shareholding in Rain to 21.0%.

Its results show that its estimate of the intrinsic value of its Rain shareholding grew from R4.5 billion in June 2023 to R5.2 billion in June 2024.

This represents a 16% jump in value.

Arc noted that this takes into account additional acquisitions of R126 million and fair value gains.

“Rain met its economic and customer service related targets, generating R2.5 billion EBITDA, resulting in fair value gain of R598 million,” Arc reported.

“The introduction of RainOne, along with the 101 5G router, has significantly boosted Rain’s growth,” Arc said.

“This, coupled with the business having moved beyond its most significant period of net cash outflows, has been a key factor in the increase in fair value of Rain’s investment.”

Arc noted that these factors and the launch of its standalone 4G mobile service contributed to its performance.

“In July 2024, Rain launched its standalone 4G mobile service and it continues to expand its coverage in various towns and major metros nationwide and achieved its budgeted EBITDA for the year ended February 2024,” it said.

“Rain has solidified its position as an affordable data and mobile service provider and continues to experience substantial subscriber growth.”

It added that, while risks remain, Arc believe Rain is well-positioned to address them and further establish itself as a trusted brand in the country.

The R2.5-billion EBITDA figure indicates that the company has grown significantly in recent years. Arc previously reported that Rain first recorded an EBITDA of R1 billion during its financial year ending February 2022.

Rain valuation

The table below provides an overview of Arc’s shareholding value and Rain’s valuation based on its estimates between December 2017 and June 2024.

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Pictured: Patrice Motsepe, African Rainbow Capital Investments chairman and major shareholder