Rainbow Children’s Medicare IPO Opens Today. Should You Invest?

Rainbow Children’s Medicare share sale via initial public offering (IPO) opened for subscription today and will close on April 29. The company is selling shares in the price band of Rs 516-542 per share to raise Rs 1,580.85 crore from the share sale. Rainbow Children’s Medicare IPO comprises of fresh issue of Rs 280 crore and an offer for sale (OFS) of Rs 1,300.85 crore. Under the OFSits private equity investors, promoter and other shareholders will sell 2.4 crore shares at the upper end of the price band at Rs 542 per share.

Rainbow Children’s Medicare IPO Price Band, Dates and Other Details:

• IPO Opening Date: April 27
• IPO Closing Date: April 29
• Face Value: Rs 10
• Price Band: Rs 516-542
• Market Lot: 27 shares
• Employee Discount: Rs 20 per share
• Book Running Lead Managers: Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited and IIFL Securities Ltd 

Retail investors can place bids in minimum one lot of 27 shares up to maximum of 13 lots. At the upper end of the price band one lot of Rainbow Children’s Medicare shares will cost Rs 14,634.

Rainbow Children’s Medicare Business

Rainbow Children's Medicare Limited operates a multi-speciality pediatric, obstetrics and gynaecology hospital chain in India. The company offers a wide range of services such as newborn and pediatric intensive care, pediatric multi-speciality services, pediatric quaternary care, obstetrics and gynaecology, which includes normal and complex obstetric care, and multidisciplinary fetal care, perinatal genetic and fertility care. Rainbow Children's Medicare operates 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds, as of September 30, 2021. In 1999, the company started its first pediatric speciality hospital in Hyderabad.

Should You Invest In Rainbow Children’s Medicare IPO

“Rainbow is one of the largest private chains of hospitals in pediatric/maternity healthcare. Given the increased western trend following, couples in India are also looking for experiential value added services during the pregnancy and delivery of their child. Also, specialty hospitals provide specialized doctors and wide array of services over legacy nursing homes. Rainbow follows a doctor engagement model whereby most of the core specialists work exclusively at the hospitals on a full-time retainer basis. This model ensures that most of the core specialists are available 24/7 on a roster basis at the hospitals, which is particularly important for children’s emergency, neonatal and pediatric intensive care services. We believe, going forward specialty chains like Rainbows are likely to gain higher market share in the specialty field as people are more inclined towards overall service aspects especially for the birth of child which is a form of celebration.  We recommend Subscribe for Long Term,” brokerage firm Nirmal bang said in a report.

“This issue is a combo of OFS & fresh issue and is priced at a PE of 43.53 on the is of annualized FY 22 numbers. The profitability for 9 months ended 31st December 2021 increased substantially to 126.41 crores from 38.53 crores in the same period of last fiscal. There might be a possibility that this sudden spurt in profitability was due to covid second wave hospitalizations in Q1 FY21-22. Thus we believe that this exponential rise in profit might not continue in the future. However, the specialized nature of the business, experienced management team, proven ability to attract, train and retain high-caliber medical professionals, under penetration of hospitals in India, make this issue good for long-term investors,” said Santosh Meena, head of research at Swastika Investmart.