Wateen Struggles in Stocks

Wateen Telecom has failed to establish its footing in the local equity markets despite efforts to streamline its businesses and operations in the fields of broadband, telephony and media services.

Currently Wateen’s share value is Rs 2.05 per share (averaging Rs 2.25 per share) in the three stock exchanges.

The company, which floated its IPOs amid much hype and sensation, is struggling to attract investors after more than 75 percent of share value has been slashed in the share markets in just 14 months.

Wateen had floated its share of Rs. 10 in the equity market in April 2010, which gradually lost its demand and value in the market subsequently the services business could not flourished because of issues mainly concerning the management and the operations.

The operator introduced initial public offering (IPO) worth Rs 2 billion in Pakistan equity markets on April 20-21 in order to expand its infrastructure network and retirement of debt. It issued 110 million shares to institutional investors and general pubic amounting to Rs 1.1 billion with a green shoe option of 90 million ordinary shares to increase its paid up capital from Rs 4.174 billion to Rs 5.275 billion.

The company attracted investors initially as it was aggressively pursuing its multiple plans in all its services including wireless telephony, broadband and infrastructure services to strengthen financial position. Its corporate clients include leading financial institutions, cellular phone companies and television channels.

It was 82 percent oversubscribed from all categories of investors with total subscription received for Rs 2.006 billion as proceeds of over 200 million shares subscribed against the offered 110 million shares at a par value of Rs 10 (for Rs 1.1 billion). The additional green shoe option of 90 million shares (for Rs 900 million) got fully subscribed too; again at a par value of Rs 10 per share.

Farhan Bashir, an analyst at InvestCap Research, said that Wateen has not maintained its strong repute among the investors as a profitable entity of the telecom and broadband sector, hence, lost its value of share sharply within the year.

He said the broadband operators have witnessed growth in subscribers’ number but the revenues are still very low because of less utility usage of its customers and non-recovery of service charges.

Besides, the operating expenditures and maintenance charges are quite higher at technical level and administrative side to keep the company in the red for long period with no sign of betterment in near future, Bashir added.

The company acquired a good share in international calling traffic and it has been a leading performer in broadband and wireless local loops sectors. The subscribers’ base of WLL user stands at 226,955 by April-end as per statistic of PTA whereas it has lion share in the Wimax market.

Though the company’s IPO was pledged to underwrite by 14 leading banks of the country but they are reluctant to provide financial leverage to the operator that could stabilize its financial health and market position in the stock markets.

Wateen’s management has witnessed change of leadership and management, which is expected to improve its operations, businesses and financial status in the future.

  • Wateen ko 2Bn ka USF project mila heh. Inshallah unka stock abhee recover ho jay ga. Umeed rakho.

  • I would recommend stockholders to sell off their share at even 2 rs … as something is better than nothing … because there is only one way to go (from the look of things) and that is down …

    Hence sell off and get what so ever you can

    • But if it goes up, Rs 2 is a good price to buy…

      I bought 2,500 at Rs 2.05 on Friday.

        • Crossing the street is also a gamble, but I do it every day to go to work.

          Wateen finances are open & in front of you. It’s not in good shape, and I do not expect to make any real profit for a while but I try to buy for the long term. I sold some shares I owned for 4 years in part to buy these 2,500 shares, because that company was doing well but not returning any profits. Despite its finances I think Wateen will do better than the other company.

          But, of course, by the time (or I should say IF) it starts to make a profit it will be worth more than Rs 2.

      • as u said in your post “BUT IF” …. hence the chances of the price going up is not much, but then it is just approx Rs 5k …. :)

        All the best :)

        • Looks like it worked out for me, right?? Except not as high as expected. Only 4.50. Still, more than double what I paid.

  • Ahsan Javed or any body else can u write an article on wateen wimax. its services, coverage, packages etc

    • You’re a little late. Many people I know didn’t invest in IPO, they waited until the price fell.

      Anyone who read the prospectus knew that a lot of the money was going to ONE PERSON. Yes, Rs 490 MILLION to one person.

      • I read the IPO document and I kinda saw it the way it is now.

        I hope they decide to do something about.

        • It is interesting to see all the stories of Mobilink executives joining Wateen in recent months. I dont think they would jump into a sinking ship. Maybe they have a plan to turn things around.

  • I want to buy some shares of wateen how can i do so tell me please . Thnx in advance

  • If rates of wateen are not brought down to compete with the competitors the share value will further decline. wateen plz wake up. you are losing business to ur rival tribe.

  • yaar manay rs 10 kaay share leyaa thaay 1000, wateen kaay share ki 10 rupee saay upper janaay ki umeed haay koi

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