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Should you be Investing in Rainbow Children’s Medicare Limited IPO?

Should you be Investing in Rainbow Children’s Medicare Limited IPO?

Investing in Rainbow Children’s Medicare Limited IPO

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About The Company

In India, Rainbow Children’s Medicare Limited is a hospital chain with specialties in pediatrics, obstetrics, and gynecology. There is a wide range of services offered by the company, including neonatal and pediatric intensive care, pediatric multi-specialty care, pediatric quaternary care, obstetrics, and gynecology, including normal and complex obstetric care, as well as multidisciplinary fetal care and perinatal genetics. By September 30, 2021, Rainbow Children’s Medicare will be operating 14 hospitals and three clinics in six cities, totaling 1,500 beds. Hyderabad was the company’s first pediatric specialty hospital when it opened in 1999.

💰Issue Details

IPO open fromApr 27th– Apr 29th, 2022Listing on BSE and NSE
Face value₹10Total issue size up to ₹1,580 crores
Price Band₹516-542Fresh Equity Issue up to ₹280 crores
Market Lot 27 sharesPromotersDr. Ramesh Kancharla, Dr. Dinesh Kumar Chirla, and Dr. Adarsh Kancharla are the company promoters.
Minimum Investment₹14,634Book running lead managersKotak Mahindra Capital Company Limited,  J.P. Morgan India Private Limited, and IIFL Securities Ltd.

What is an IPO and should you invest in them?

✂️Offer Breakup

The offer is broken up into the following investor classes:

🏷️IPO Object

Rainbow Children’s Medicare Limited IPO Size is ₹1580crores and below are the objects of the IPO:

1) Offer for Sale (OFS) 1300crores:  Under this OFS, shareholders would sell their shares and the company would not receive any part of the IPO proceeds.

2) Fresh issue of 280crores:  Fresh issue would be done for the following purposes:

  • The Early redemption of NCDs issued by the Company, in full.
  • Capital expenditure towards setting up of new hospitals and purchase of medical equipment for such new hospitals.
  • Rest will be for general corporate purposes, subject to applicable laws.

📊IPO Timeline

IPO open date27-Apr -2022Initiation of refunds06-May-2022
IPO close date29-Apr-2022The credit of shares to the Demat Account09-May-2022
Basis of allotment date05-May- 2022IPO listing date10-May-2022

🔭IPO Strengths

  • A leading pediatric multi-specialty healthcare chain with a reputation for managing complex illnesses.
  • A comprehensive perinatal care provider that offers synergistic care for pediatrics and obstetrics and gynecology.
  • Provides synergies and ensures better care for patients with a hub-and-spoke model.
  • Strong institutional shareholder support with an experienced senior management team.
  • Exceptional performance in terms of growth, operations, and finances.

🔎IPO Risks

  • Depending on the ability to attract and retain medical professionals.
  • Their doctors are contracted primarily on a consulting basis, and there is no guarantee that their contracts will not be terminated prematurely.
  • Non-compliant with applicable safety, health, environment, labor, or other regulations, such as failing to obtain or renew approvals, licenses, registrations, and permits.
  • Providers of healthcare services face intense competition.

🚀Financial Data

ParticularsFor the year/period ended (₹ in Cr)
Total Revenue774660730
Total Expenses602605636
Profit After Tax126.4139.5755.34
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