GMP, Valuation, Review; Should you Invest?

Rainbow Children’s Medicare IPO: Rainbow Children’s Medicare IPO will open today i.e. April 27 and the public issue worth Rs 1,595 crore will remain open till April 29, 2022. The company offers services such as pediatric multi-specialty services, obstetrics and gynecology, newborn and pediatric intensive care, and pediatric quaternary care. The IPO has an issue size of Rs 1,580 crore. Out of the total, the IPO has a fresh issue of Rs 280 crore. The IPO has an offer for sale of Rs 1,300.85 crore. The multi-specialty pediatric hospital chain has garnered nearly Rs 470 crore from anchor investors ahead of its initial public offering (IPO).

Rainbow Children’s Medicare IPO: Price Band

The multi-specialty hospital management has fixed price band of its offer at Rs 516 to Rs 542 per share.

Rainbow Children’s Medicare IPO: GMP

According to market observers, shares of Rainbow Children’s Medicare are available at a premium of Rs 50 in grey market today. Observers said that rise in GMP can be taken as a good signal from the grey market as secondary market sentiment has been negative for last two sessions and today stock market has opened in red territory. They said that there would sharp upside movement in Rainbow Children’s Medicare share price in grey market once there is trend reversal in secondary market. In last few days, Rainbow Children’s Medicare IPO GMP had dipped from Rs 53 to Rs 35. So, today’s rise is expected to give relief to those who are planning to invest in the public issue. Rainbow Children’s Medicare IPO GMP today is Rs 50, which means grey market is expecting Rainbow Children’s Medicare IPO to list around Rs 592 ( Rs 542 + Rs 50), which is around 9 per cent higher from its upper price band of Rs 542 per equity share.

Rainbow Children’s Medicare IPO: Subscription, Share Allotment, and Listing Dates

-Rainbow Children’s Medicare IPO subscription date: The public issue will open on 27th April 2022 and it will remain open for bidders till 29th April 2022.

-Rainbow Children’s Medicare IPO allotment date: The tentative date for share allocation announcement is 5th may 2022.

-Rainbow Children’s Medicare IPO listing date: The likely date for Rainbow Children’s Medicare share listing is 10th May 2022.

Rainbow Children’s Medicare IPO: How to Subscribe?

Bidders can log in at the website of their broker or app (where they have their Demat account), select Rainbow Children’s Medicare IPO, enter their UPI ID and select the investor type. The quantity should be a multiple of the lot size. If you wish to apply at the cut-off price, simply click on the checkbox next to ‘Cut-off price’. You will receive an SMS from the NPCI confirming your bid and requesting you to accept the mandate on your UPI app.

Rainbow Children’s Hospital IPO: Should You Invest?

Santosh Meena, Head of Research, Swastika Investmart, said that the company followed a financially disciplined model, focusing on cost-effective growth. Going forward, they may seek to expand their hospital network through acquisition of Brownfield assets or the development of Greenfield assets.

“We believe that this exponential rise in profit might not continue in the future. However, the specialized nature of the business, experienced management team, proven ability to attract, train and retain high-calibre medical professionals, under penetration of hospitals in India, make this issue good for long-term investors.”

Reliance Securities, in its IPO note, said, “On FY22 annualized financials, the IPO is valued at 15.8x EV/EBITDA, 5.3x EV/sales, and 33x P/E, which is largely comparable with peers. Rainbow has the ability to conceptualize, create and operate specialized children’s hospitals and is a major factor in child health services. It has the strong clinical expertise to manage complex diseases and with its hub and spoke model, provides synergies and ensures better care and access for patients. Moreover, with a strong financial track record and experienced management team, the company is well-positioned in the segment. In view of the specialized portfolio, hospital expansion, improving financials, likely margin improvement, and valuation comfort compared to peers, we recommend subscribe rating to the issue.”

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