Rainbow Children's Medicare IPO: Opens today; find key details before subscribing

Hyderabad-based Rainbow Children's Medicare Ltd will open its Rs 1,581 crore-initial public offer (IPO) for subscription on Wednesday, April 27, 2022. The issue will close on Friday, April 29, 2022.

The price band of the issue has been fixed at Rs 516-542 per share. The IPO consists of a fresh issue of shares worth Rs 280 crores and an offer-for-sale worth Rs 1,301 crores by the company's promoters and selling shareholders.

The proceeds of fresh issue will be used for early redemption of non-convertible debentures (NCDs) issued by the company in full, capital expenditure towards setting up of new hospitals and purchase of medical equipment; and general corporate purposes.

Retail investors can bid for a minimum of 27 equity shares and in multiples thereof. 50% of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors. The offer also includes a reservation of up to 3 lakh shares for employees, who will receive shares at a discount of Rs 20 to the final offer price.

Kotak Investment Banking, JP Morgan India Private Limited and IIFL Securities Limited are the lead managers of the issue and KFin Technologies Limited is the registrar for it.

Rainbow is a multi-speciality paediatric and obstetrics and gynaecology hospital chain operating 14 hospitals and three clinics in six cities - Hyderabad, Bengaluru, Visakhapatnam, Vijayawada, Chennai and NCR - with a total bed capacity of 1,500 beds, as of December 31, 2021.

According to the CRISIL Report (which was commissioned and paid for by our Company in relation to the Offer), the firm had the highest number of hospital beds amongst comparable players in the maternity and paediatric healthcare delivery sector, as of March 31, 2021. Its core specialities are paediatrics, which includes newborn and paediatric intensive care, paediatric multi-speciality services, paediatric quaternary care (including multi-organ transplants), obstetrics and gynaecology.

Rainbow's revenue from operations for the nine months ended December 31, 2021, and the financial years 2021, 2020 and 2019 amounted to Rs 7,613.11 million, Rs 6,500.47 million, Rs 7,193.91 million and Rs 5,427.92 million, respectively. For the same periods, its profit for the period/year amounted to Rs 1,264.13 million, Rs 395.68 million, Rs 553.40 million and Rs 445.90 million, respectively, and our Adjusted EBITDA amounted to Rs 2,567.42 million, Rs 1,628.34 million, Rs 1,970.27 million and Rs 1,485.14 million, respectively.