Rainbow Children’s Medicare Limited IPO

Rainbow Children’s Medicare Ltd (RCML) will raise Rs 1,581 crore through an initial public offering (IPO) . The price band for the IPO has been fixed at Rs 516-542 per equity share. The face value is Rs 10 per equity share. The subscription for the IPO will open on April 27 and end on April 29.

The issue comprise of fresh issue of equity shares aggregating to Rs 2800 million and an offer for sale (OFS) of up to 24 million equity shares by promoters and existing shareholders of the company.


Company Summary

Rainbow Children’s Medicare is a leading multi-specialty pediatric and obstetrics and gynecology hospital chain in India. It has 14 hospitals and 3 clinics in six cities, with a total bed capacity of 1,500 beds, as of December 31, 2021.

The company’s core specialties are pediatrics, which includes newborn and pediatric intensive care, pediatric multi-specialty services, pediatric quaternary care (including multi organ transplants); and obstetrics and gynecology, which includes normal and complex obstetric care, multidisciplinary fetal care, perinatal genetic and fertility care.

Rainbow follows a doctor engagement model whereby most of its core specialists work exclusively at our hospitals on a full-time retainer basis. This model ensures the specialists are available 24/7 on a roster basis at their hospitals, which is important for children’s emergency, neonatal and pediatric intensive care services. As of December 31, 2021, we had 641 full-time doctors and 1,947 part time/visiting doctors.

In its red herring prospectus, the company said that it may seek to expand its hospital network through acquisition of brownfield assets or development of greenfield assets depending upon the location of the hospital and the time period required to complete the project.

The company plans to increase the scale of their reach to patients through a robust digital ecosystem. During peak coronavirus time, i.e., between April 1, 2020 and March 31, 2021, Rainbow conducted over 125,000 outpatient video consultations through its video consultation platform.

The company believes that there is a potential to establish a hybrid model of healthcare delivery, which allows them to provide outpatient consultations through virtual means and subsequent inpatient admissions, if needed, at its network hospitals. The company is in the process of building a digital healthcare delivery solution that enables healthcare delivery irrespective of geography.


Company Financials

Particulars

For the year/period ended (Rs in millions) except %

9M FY22

FY21

FY20

FY19

Total Assets

12,397.56

10,812.67

10,192.37

9,263.96

Total Revenue

7,740.62

6,603.10

7,297.37

5,511.44

Profit After Tax

1,264.13

395.68

553.4

445.9

ROCE

22.06%

10.48%

16.32%

11.68%

ROE

21.29%

8.82%

13.52%

11.98%


Company Strengths

  • Leading pediatric multi-specialty healthcare chain with strong clinical expertise in managing complex diseases.
  • Demonstrated ability to conceptualize, create and operate specialized children’s hospitals.
  • Comprehensive perinatal care provider, with synergies between pediatric and obstetrics and gynecology services.
  • Hub-and-spoke model that provides better care and access for patients.
  • Proven ability to attract, train and retain high-quality medical professionals.
  • Strong track record of growth, operational and financial performance.
  • Experienced senior management team with strong institutional shareholder support.


Purpose of the IPO

  • Early redemption of NCDs issued by Rainbow to CDC Emerging Markets Limited (“CDCEML”), one of the Group Companies, totalling Rs 400 million.
  • Capex towards setting up of new hospitals and purchase of medical equipment for new hospitals aggregating to Rs 1,700 million.
  • General corporate purposes.


Company Promoters

Dr. Ramesh Kancharla, Dr. Dinesh Kumar Chirla and Dr. Adarsh Kancharla are the promoters of the company.


IPO Details

IPO Opening Date

27-Apr-22

IPO Closing Date

29-Apr-22

Issue Type

Book Built Issue IPO

Face Value

Rs 10 per equity share

IPO Price

Rs 516 to Rs 542 per equity share

Market Lot

27 Shares

Minimum Order Quantity

27 Shares

Listing At

BSE, NSE

IPO Lot Size

Application

Lots

Shares

Amount (Cut-off)

Minimum

1

27

Rs 14,634

Maximum

13

351

Rs 190,242

IPO Allotment Details

Rainbow Children’s Medicare Limited IPO allotment date is on May 5, 2022 and expected initiation of refund is on May 6, 2022. The shares are likely to be listed on the exchanges on May 10, 2022

You can check your allotment in BSE or KFin Technologies