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Rainbow Children’s Medicare IPO Subscribed 12.43 Times on Day 3!

08 August 20226 mins read by Angel One
Rainbow Children’s Medicare IPO Subscribed 12.43 Times on Day 3!
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The IPO of Rainbow Group was subscribed 12.43 times as of 29 April 2022 or the closing day. It comprises a total of 25,49,00,439 bids against an offer of 2,05,14,617 equity shares to its investors, based on the official portal of NSE. With the offer for sale in this public issue, Dinesh Kumar Chirla, Padma Kancharla, Ramesh Kancharla, CDC India, and British International Investment PLC are divesting their shares.

Rainbow Children’s Medicare Limited is a renowned hospital chain that specialises in gynaecology, obstetrics, and paediatrics. It operates 3 clinics and 14 facilities in 6 cities − NCR, Chennai, Vijayawada, Visakhapatnam, Bengaluru and Hyderabad. The main facility of 250 beds and 4 other hospitals with 25 to 50 beds are located in Hyderabad. The company aims to include two more hospitals within the coming two years.

In this IPO, the price range is between Rs. 516 – Rs. 542 apiece. The lead managers of the issue are JP Morgan India, Kotak Mahindra Capital Company and IIFL Securities.

Day 3 Performance Status of Rainbow Children’s Medicare IPO

On 27 April 2022, the much-awaited public issue of Rainbow Group hit the Indian market. Go through the following pointers to know about the total number of shares reserved and subscribed against this offer under the various investment quotas:

  • QIBs (Qualified Institutional Buyers) bid for 22,46,97,591 shares against a reservation of 57,75,605 shares.
  • NIIs (Non-Institutional Investors) subscribed for 1,61,62,740 shares against an offer of 43,31,704 equity shares.
  • RIIs (Retail Individual Investors) have a reservation of 1,01,07,308 shares under which they bid for 1,39,47,984 shares.
  • Further, employees subscribed for 92,124 shares against an offer of 3,00,000 equity shares.

Here is the chart that illustrates the number of times employees, RIIs, NIIs and QIBs subscribed to the IPO of Rainbow Hospitals as of 29 April 2022:

Investor Category Employees RIIs NIIs QIBs Total
Subscription Status (in times) 0.31 times 1.38 times 3.73 times 38.90 times 12.43 times

The reservations for NIIs and RIIs are 15% and 35%, respectively. However, institutional investors qualify for half of the public offer.

A Quick Glance into the Rainbow Children’s Medicare IPO Anchor Allotment Status 

On Tuesday, 26 April 2022, Rainbow Group finished the subscription for its anchor allocation. It received a favourable response from the anchor investors who participated via the procedure of book building.

As such, 36 anchor investors fetched an allotment of 86,63,404 equity shares. The overall allocation was worth Rs. 469.56 crores. Following is the list of the major anchor investors who attributed 61.69% of the total anchor allocation.

Anchor Investor Value Allocated (in Rs. crores) Anchor Portion No. of Shares
Baroda BNP Multi Cap Fund 20.02 4.26% 369,036
DSP Small Cap Fund 20.02 4.26% 369,036
Birla Sun Life Small Cap Fund 20.02 4.26% 369,036
HDFC Life Insurance 20.02 4.26% 369,036
Nippon India Pharma Fund 24.24 5.16% 447,228
Ashoka India Opportunities Fund 32.09 6.83% 592,056
Government of Singapore 35.40 7.54% 653,076
Neuberger Berman EM Equity 37.09 7.90% 684,342
Amansa Holdings Private Limited 40.41 8.61% 745,478
SBI Healthcare Opportunities Fund 40.41 8.61% 745,478

Through this pre-IPO round, the anchor response stood at 29.70% of the overall issue size. The allotment for 18 mutual fund schemes against 9 AMCs has been 38.97 lakh equity shares. In addition, the allocation for mutual funds covers 44.99% of the total anchor allocation.

Day 1 and Day 2 Status of Rainbow Children’s Medicare IPO

Investor Category Employees RIIs NIIs QIBs Total
Day 1 0.07 times 0.48 times 0.11 times 0.10 times 0.29 times
Day 2 0.14 times 0.82 times 0.56 times 0.10 times 0.55 times

Final Thoughts

Rainbow Hospitals primarily focus on child care and multi-speciality paediatric services. The target segment is likely to expand at a 14% CAGR till Fiscal 2026. With a sustained growth trajectory in the midst of rising consolidation in margin profile and healthcare space, the company will flourish.

Highly qualified and experienced medical practitioners are available 24×7 in their hospitals. The company conducts outpatient consultations using video conferencing platforms to extend its reach in India and abroad. Further, it maintains a healthy margin expansion and strong revenue.

Individuals who want to invest in Rainbow Group can open an easy-to-use Demat account with the Angel One app/portal through an instant and streamlined process. Follow Angel One blogs for more stock market, IPO, and business news.

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Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.

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