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Mobile network operator Rain’s valuation has leapt by over R4.35 billion in the past six months, according to the latest annual results of shareholder African Rainbow Capital (Arc) Investments.

Arc Investments holds a 20.25% stake in Rain, and it reported that its share grew R881 million from R3.635 billion last year to R4.516 billion in June 2023.

This represents an over 24% surge in value.

“This increase in value can largely be attributed to the business progressing beyond the period of significant net-cash outflow as well as the recent acquisition of additional spectrum,” Arc stated.

“Rain launched its 4G mobile voice offering together with its new 5G home product, Rain One, during May 2023.”

Arc said there has been strong interest in the Rain One product since its launch.

“Rain continues to receive positive feedback from new and existing customers,” said Arc.

“Rain continues its ambitious rollout and marketing strategy to cover more towns across the country and will continue densifying coverage in all major metros.”

The company also reported that the ARC Fund made an additional investment of R81 million in Rain during August 2023.

Arc reported that Rain is tracking well against budgets and that it is budgeted to achieve earnings before interest, taxation, depreciation, and amortisation (EBITDA) of over R2.5 billion for the year ending February 2024.

“[This is] after taking into account IFRS 16 adjustments, as is industry practice,” Arc stated.

Rain’s earnings has increased substantially over the past few years, with Arc reporting that the operator first achieved R1 billion EBITDA during its financial year ending February 2022.

“This is regarded as a significant achievement as it achieved break-even in the February 2021 financial year,” Arc said at the time.

In March, Arc said Rain was on course to achieve over R2 billion EBITDA for the year ending February 2023.

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 2023.

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
December 2021 20.26% R3.372 billion R16.644 billion
June 2022 20.25% R3.635 billion R17.951 billion
December 2022 20.25% R3.635 billion R17.951 billion
June 2023 20.25% R4.516 billion R22.3 billion
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