Rainbow Children’s Medicare IPO: GMP, subscription status on last day of issue

The three-day initial public offering (IPO) of Rainbow Children's Medicare Limited had opened for subscription on April 27 and will conclude today. 

As of 10:10 am on the last day of the issue, Rainbow Children's Medicare IPO has been subscribed 57%. The portion for Retail Individual Investors (RIIs) got subscribed 84%, while non institutional investors received 58% subscription and the quota for Qualified Institutional Buyers (QIBs) was subscribed 10%, BSE data showed.

As per market observers, Rainbow Children's Medicare shares are available at a premium (GMP) of ₹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.

The IPO, comprising fresh issue aggregating up to ₹280 crore and an offer for sale of up to 2,40,00,900 equity shares, has a price range of ₹516-542 apiece. On Tuesday, the multi-speciality pediatric hospital chain said it garnered nearly ₹470 crore from anchor investors. At the upper end of the price band, the IPO is expected to fetch ₹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. 

As of December 20, 2021, Rainbow operates 14 hospitals and three clinics in six cities in India, with a total bed capacity of 1,500 beds. Kotak Mahindra Capital Company, JP Morgan India and IIFL Securities are the books running lead managers to the issue.