CDC group-backed Rainbow Children's Medicare files IPO papers with Sebi

Rainbow Children's Medicare IPO

Rainbow Children’s Medicare, a multi-specialty paediatric and obstetrics and gynaecology hospital chain, has filed the draft red herring prospectus with the capital markets regulator Sebi for public listing.

The initial public offering comprises a fresh issue of Rs 280 crore, and an offer-for-sale of 2.4 crore equity shares by several selling shareholders.

Promoters Ramesh Kancharla, Dinesh Kumar Chirla and Adarsh Kancharla will sell shares through the OFS route. Investors CDC Group and CDC India will also offload shares through OFS.

The offer includes a reservation of up to three lakh equity shares for the company’s employees.

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The proceeds from the fresh issue will be utilised for early redemption of NCDs and capital expenditure towards setting up of new hospitals and purchase of medical equipment for such new hospitals, besides general corporate purposes.

Rainbow Children’s Medicare operates 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds, as of September 2021. It had the highest number of hospital beds among comparable players in the maternity and paediatric healthcare delivery sector, as of March 2021.

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The company reported profit at Rs 39.56 crore in the year ended March 2021, falling from Rs 55.34 crore in previous year, and revenue in the same period also declined to Rs 650 crore compared to Rs 719.39 crore.

In the six months ended September 2021, profit shot up to Rs 81.22 crore from Rs 23.31 crore in corresponding period last fiscal. Revenue also increased considerably to Rs 512.55 crore from Rs 309.78 crore during the same period.

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Promoters hold 63.70 percent in the company and the rest is held by public shareholders, including the UK’s development finance institution CDC Group and CDC India, which own 30.45 percent stake.

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