Rainbow Children's Medicare Limited IPO - Should I apply or avoid - All details
Rainbow Children’s Hospital which operates over 1000+ beds spread around the country with advanced neonatal & pediatric intensive care services, has come up with an ₹1580 crore IPO.
Should one apply or avoid? Let’s have a look.
About the company :
Rainbow Children’s Medicare Limited operates a multi-speciality pediatric, obstetrics and gynaecology hospital chain in India. Started by Dr. Ramesh Kancharla in 1999, First hospital was established in Hyderabad. Rainbow Children’s Hospital has more than 14 hospitals across the nation as of 2021.
The company offers services such as pediatric multi-speciality services, obstetrics and gynaecology, newborn and pediatric intensive care, and pediatric quaternary care.
The hospital also has an exclusive perinatal vertical, BirthRight By Rainbow, to provide complete care for would-be-mothers, mothers, fetus and the newborn. It also offers fertility services. The hospital, proud of its track record in nurturing smiles and happiness has won the trust of every parent, who have together helped the hospital emerge as a name to reckon with.
Also, the company plans to use the money raised through share sales for paying debt, setting up new hospitals and purchasing medical equipment for such new hospitals and general corporate purposes.
“We will plan to add 500 beds more over the next three years with an investment of ₹60 lakh per bed,’‘ Kancharla said, adding that plans were being drawn up to expand to the northeast region.
About the IPO:
◇ The company will issue Equity shares worth 280 crores and existing shareholders and Promoters will offload 2.4 crore shares from their stake through OFS.
◇ IPO will open to public for subscription on 27th April, 2022 and will close on 29th April, 2022.
◇ One can make minimum investment of ₹ 13,932.
◇ The lot size is 27 shares per lot and IPO price band is between ₹516 to ₹542.
◇ The face value of share is ₹10 per share and will be listed on NSE and BSE.
◇ Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited and IIFL Securities Limited are the Book Running Lead Managers.
Financials:
◇ The company growth is considered good since last 3 years.
◇ As per their annual estimates and data, sales growth was 23% CAGR and Profit growth was more than 50% CAGR.
Pros:
◇ Negligible Debt/Equity ratio.
◇ ROCE is more than 20%.
◇ Pediatric Healthcare market is estimated to grow by 14% CAGR.
◇ According to market observers, Rainbow Children's Medicare share price is quoting at a premium of ₹50 in grey market as of 26th April, 22.
Cons:
◇ Capital Intensive and competitive Market.
◇ "The asking valuations is in-line with listed players. However, It would be keen to watch if the company can maintain 9MFY21 performance going ahead," Abhay Doshi of UnlistedArena.com said.
Conclusion:
◇ RCML's major focus is towards child care health services and is gaining momentum. Based on its FY22 annualized earnings the issue is priced at a P/E of around 43.5 making it a reasonably priced offer.
◇ The company is also a dividend-paying company. Investors may consider an investment with a short to long term perspective
◇ However, DO YOUR OWN RESEARCH BEFORE INVESTING AND DON’T TAKE IT AS AN RECOMMENDATION.
You can refer to company website for more details.
Happy Investing!!
Nice information👍