Rainbow Children’s Medicare IPO: The initial public offer (IPO) of Rainbow Children’s Medicare IPO opened for public subscription on Wednesday, April 27, 2022. The three-day Rs 1,580.85 crore IPO will close on April 29. Of the total IPO size, fresh issue comprises Rs 280 crore and an offer for sale of Rs 1300.85 crore. The company, which runs a multi-speciality pediatric, obstetrics and gynaecology hospital chain, has kept a price band of Rs 516 – 542 for this offer. An investor can apply for a minimum one lot, which has 27 shares.  

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As the three-day IPO of Rainbow Children’s Medicare opens today, Zee Business Managing Editor Anil Singhvi and brokerages recommend what should investors do with this issue and how should they approach the IPO. Here is what they recommend: 

Anil Singhvi, Managing Editor, Zee Business 

Zee Business Managing Editor was of the view that the company has highly competitive business and dependence on Southern India Market is huge, hence only high-risk taking investors should apply for this issue.  

Speaking of positive, he said the company offers good financial track record, has strong cashflow with low debt and comes with reasonable valuations.  

Swastika Invesmart 

The Company has followed a financially disciplined model, focusing on cost-effective growth. Going forward, they may seek to expand their hospital network through the acquisition of Brownfield assets or development of Greenfield assets. 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.  

We believe that this exponential rise in profit might not continue in the future. However, the specialized nature of business, experienced management team, proven ability to attract, train and retain high-caliber medical professionals, under penetration of hospitals in India, makes this issue good choice. Thus we assign a "SUBSCRIBE" rating to this IPO for long-term.  

Marwadi Financial Services 

Considering the TTM (Dec 21) EPS of Rs 12.56 on a post issue basis, the company is going to list at a P/E of 43.16x with a market cap of Rs.55,013 mn whereas its peers namely Apollo Hospital Enterprise Ltd and Fortis Healthcare Ltd are trading at PE of 77.3x and 56.9x respectively. We assign “Subscribe” rating to this IPO as the company is a leading pediatric multi-specialty healthcare chain with strong clinical expertise in managing complex diseases. Also, it is available at reasonable valuation as compared to its peers.   

Earlier on Tuesday, the company has garnered nearly Rs 470 crore from anchor investors ahead of its initial public offering (IPO). 

About the company 

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.