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 |
