Rainbow Childrens Medicare Ltd IPO

Current DRHP

IPO Synopsis

Details on IPO
Rainbow Children's Medicare Ltd, a multi-specialty pediatric hospital chain, has filed preliminary papers with market regulator Securities and Exchange Board of India (SEBI) to raise over ₹2,000 crore through an initial public offering (IPO). 
The public issue comprises fresh issue of equity shares aggregating up to Rs 280 crore and an offer sale of up to 2.4 crore equity shares by the selling shareholders
Promoters Ramesh Kancharla, Dinesh Kumar Chirla and Adarsh Kancharla and investors CDC Group, CDC India will offload shares through OFS.
Kotak Mahindra Capital Company, J.P. Morgan India and IIFL Securities are the book running lead managers to the issue.


Objective of the Issue
The company proposes to utilise the net proceeds from the fresh issue towards 
•    early redemption of non-convertible debentures (NCDs) issued by the company, in full
•    capital expenditure towards setting up of new hospitals
•    purchase of medical equipment for such new hospitals
•    general corporate purposes
 

Rainbow Childrens Medicare Ltd IPO Subscription Status

  QIB NII Retail Employee TOTAL
Day 1 0.10x 0.11x 0.48x 0.07x 0.29x
Day 2 0.10x 0.56x 082.x 0.14x 0.55x
Day 3 38.90x 3.73x 1.38x 0.31x 12.43x

About Rainbow Childrens Medicare Ltd

Rainbow, backed by UK-based development finance institution CDC Group plc, established its first 50-bed pediatric specialty hospital in 1999 in Hyderabad. It is a leading multi-specialty pediatric and obstetrics and gynecology hospital chain in India, operating 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds. Its 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.
It follows a doctor engagement model thus ensuring the availability of most of the specialities available at the firm’s hospital 24/7. In 2021, the firm had 602 full-time doctors and 1,686 part time/visiting doctors. A number of hired doctors in neonatal, pediatric intensive care, pediatric sub specialties, obstetrics and gynaecology are trained or possess qualifications from the United Kingdom, United States, Canada and Australia, which provides the firm with a competitive advantage. The newly hired doctors enter a retainership contract of initial two to three year periods, which provides them with stability and making it a desirable workplace
The firm plans to increase the scale of its reach to patients through a robust digital ecosystem. The pandemic period, FY 2020-2021, driven in part by the movement restrictions arising out of the COVID-19 pandemic, they conducted over 125,000 outpatient video consultations through video consultation platform including in locations where it does not have a physical presence (within India and abroad).
 

Financials

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Revenue

650.05

719.39

542.79

EBITDA

173.10

207.37

156.87

PAT

40.02

55.73

44.59

EPS (basic in Rs.)

4.36

5.98

4.83

ROE

8.88%

13.68%

12.01%

ROCE

10.48%

16.32%

11.68%

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Total Assets

1081.27

1019.24

926.40

Share Capital

54.90

54.90

54.90

Total Borrowings

47.97

57.68

52.64

 

Particulars (in Rs. Crores)

FY21

FY20

FY19

Net cash generated from / (used in) operating activities

142.71

170.41

127.24

Net cash from / (used in) investing activities

-82.88

-117.03

-116.89

Net cash flow from / (used in) financing activities

-60.87

-51.81

-8.69

Net increase (decrease) in cash and cash equivalents

-1.04

1.56

1.66

 

Peer Comparison

 

Name of the company

Total Revenue (in Rs. crores)

Basic EPS

NAV Rs. per share

PE

RoNW %

Rainbow Children's Medicare

660.31

4.36

48.82

NA

8.88%

Apollo Hospitals Enterprise Limited

10,605.00

10.74

320.1

485.29

3.30%

Fortis Healthcare Limited

4,076.68

-1.45

81.06

NA

-0.75%

Narayana Hrudalaya Limited

2,610.52

-0.7

54.82

NA

-1.46%

Max Healthcare Institute Limited

2,619.41

-1.59

58.37

NA

-2.47%

Krishna Institute of Medical Sciences Limited

1,340.10

26.87

111.32

51.17

-2.47%


The key points are-

Key Points

  • Strengths

    1.    Ability to conceptualize, create and operate specialized children’s hospitals
    2.    Leading pediatric multi-specialty healthcare chain with strong clinical expertise in managing complex diseases
    3.    Comprehensive perinatal care provider, with synergies between pediatric and obstetrics and gynecology services
    4.    Hub-and-spoke model that provides synergies and ensures better care and access for patients
    5.    Proven ability to attract, train and retain high-caliber medical professionals
     

  • Risks

    1.    Dependent on ability to attract and retain medical professionals
    2.    Engage doctors primarily on a consultancy service contract basis and there is no assurance that their doctors will not prematurely terminate their agreements
    3.    Failure to manage growth or implement growth strategies
    4.    Failure to obtain or renew approvals, licenses, registrations and permit or failing complying with applicable safety, health, environmental, labor and other regulations.
    5.    Face intense competition from other healthcare service providers
     

How to apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked

FAQs

What is the lot size and investment required for the Rainbow Children’s Medicare IPO?

The Rainbow Children Medicare IPO market lot size is 27 shares (Rs. 14,634). A retail-individual investor can apply for up to 13 lots (351 shares or Rs. 190,242). 

What is the price band of the IPO?

The price band of the IPO is set at Rs. 516 to Rs. 542 per equity share

When does the Rainbow Children’s Medicare issue open and close?

The Rainbow Children Medicare IPO opens on Apr 27, 2022, and the closes on Apr 29, 2022.

What is the size of Rainbow Children’s Medicare IPO issue?

The fresh issue comprises fresh issue of equity shares aggregating up to Rs 280 crore and an offer sale of up to 2.4 crore equity shares.

Who are the promoters/key personnels of Rainbow Children’s Medicare?

Rainbow Children’s Medicare is promoted by Dr. Ramesh Kancharla, Dr. Dinesh Kumar Chirla and Dr. Adarsh Kancharla.

What is the Rainbow Children’s Medicare listing date?

The issue will be listed on May 10, 2022

Who are the book runners for Rainbow Children’s Medicare IPO?

Kotak Mahindra Capital Company, J.P. Morgan India and IIFL Securities are the book running lead managers to the issue.

What is the objective of the issue?

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

How to apply for the Rainbow Children’s Medicare IPO?

To apply for the IPO, follow the steps given below
•    Login to your 5paisa account and select the issue in the current IPO section
•    Enter the number of lots and price at which you wish to apply for
•    Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
•    You will receive a mandate notification to block funds in your UPI app