The value of Rain has grown by more than half in three years, says African Rainbow Capital (ARC), which has increased its equity stake in the telecom operator.
Over the years, ARC has seen the value of its investment rise steadily. The entire telecom business is valued at R25.92bn, up from R16.6bn in March 2022 — an increase of 56.1% — according to ARC Investments’ financial statements.
“During the reporting period ARC Fund bought shares from some of the existing shareholders of Rain and invested funds in new ventures totalling R172m,” ARC said in its earnings report for the six months to end-December.
That increased the valuation of ARC Fund’s 21.77% shareholding in Rain to R5.64bn at the end of the review period from R5.24bn in June 2024.
The investment group, which is controlled by billionaire Patrice Motsepe, said Rain had recorded a strong performance in the period for its fixed wireless offering and recently launched mobile business.
“The increase in fair value was as a result of the business progressing past the significant net cash outflow period, together with the successful launch of RainOne and the utilisation of the spectrum acquired in the last auction,” it said.
ARC invests in start-up businesses that aim to disrupt the status quo in areas such as financial services and telecom. Its portfolio of listed and unlisted assets is valued at R19.4bn.
During the period, ARC Investments also made additional investments of R393m in Kropz Group, R87m in ARCH Emerging Markets Partners and R46m in “other investments”.
ARC continues to be bullish about the communications company’s prospects.
“Rain has established a solid foundation and continues to enjoy high subscriber growth driven by the strong performance of its RainOne and Rain mobile offerings. Its network received a significant upgrade to Huawei’s Apollo 5.5G, enhancing performance and capacity,” it said.
RainOne subscription plans, introduced in May 2023, offer customers packages that combine a fixed-5G plan with two Rain 4G mobile SIMs.
ARC said Rain launched new offerings, supported by the 101 pro and 101 xtender router products, “providing customers with even more connectivity options”.
“Rain continues to strengthen its brand with customer trust index scores which remain well above the telco industry average [as measured by online review websites Trust Pilot and Hello Peter].”
In July 2024 Rain launched the stand-alone 4G mobile service with plans to expand its coverage in towns and major metros nationwide.
Rain had previously provided data only, focused on fixed internet connections to homes.
After years of trading at a discount to the value of its underlying assets, ARC on Tuesday said it would delist from the JSE, as first reported by Business Day in 2023.
ARC, whose prized assets include TymeBank and Alexforbes, said the delisting would return more value to shareholders.
The discount refers to the difference between a company’s share price and its net asset value, which in ARC’s case has been persistently above 40% since listing.
Correction: March 26 2025
A previous version of this article said ARC owned 26% of Rain. This is in fact 21.76%. All related figures and calculations have been updated.
With Kabelo Khumalo
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