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Rainbow Childrens Medicare IPO subscribed 55 per cent

written by Bella Palmer

The IPO received bids for 1,12,62,753 shares against 2,05,14,617 shares on offer, according to NSE data

The initial public offering of Rainbow Childrens Medicare Limited was subscribed 55 per cent on the second day of offer on Thursday.

The IPO received bids for 1,12,62,753 shares against 2,05,14,617 shares on offer, according to NSE data.

The portion for Retail Individual Investors (RIIs) got subscribed 82 per cent, while non institutional investors received 56 per cent subscription and the quota for Qualified Institutional Buyers (QIBs) was subscribed 10 per cent.

The offer, comprising fresh issue aggregating up to Rs 280 crore and an offer for sale of up to 2,40,00,900 equity shares, has a price range of Rs 516-542 apiece.

As per market observers, Rainbow Children's Medicare shares are available at a premium (GMP) of Rs. 31 in the grey market today. The equity shares of the company are expected to list on leading stock exchanges BSE and NSE on Tuesday, May 10, 2022.

Rainbow Children’s Medicare has a focused children centric approach. The target market is expected to grow at a CAGR of 14% till FY26. However, key for Rainbow would be sustained current growth trajectory amid increased consolidation in healthcare space and margin profile. We assign subscribe rating given its unique model and decent valuation, ICICI Securities said in a note.

On Tuesday, the multi-speciality pediatric hospital chain said it garnered nearly Rs 470 crore from anchor investors.

At the upper end of the price band, the IPO is expected to fetch Rs 1,581 crore.

The company proposes to utilise the net proceeds from the fresh issue for early redemption of non-convertible debentures in full, capital expenditure towards setting up of new hospitals and purchase of medical equipment, and general corporate purposes.

Rainbow Childrens Medicare, backed by UK-based development finance institution CDC Group plc, established its first 50-bed pediatric speciality hospital in 1999 in Hyderabad (India).

Kotak Mahindra Capital Company, J P Morgan India and IIFL Securities are the managers to the offer.


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