The public issue of paediatric multi-specialty hospital chain operator Rainbow Children's Medicare has seen 55 percent subscription on the second day, getting bids for 1.12 crore shares against offer size of 2.05 crore shares. The issue will close on April 29.
The response has been muted maybe due to market volatility.
Retail investors bought 82 percent of their quota and employees bid for 14 percent of their reserved portion.
The part set aside for qualified institutional investors was booked 10 percent and that for non-institutional investors 56 percent.
Click Here For Latest LIC IPO Updates
The South India focused hospital chain is planning to raise Rs 1,581 crore through its initial public offering (IPO), of which Rs 469.55 crore was mopped up from anchor investors on April 26.
The offer comprises a fresh issue of shares worth Rs 280 crore and an offer for sale of Rs 1,301 crore by promoters and investors. The company will redeem debts and set up new hospitals with fresh issue proceeds.
The price band for the offer, which opened on April 27, is Rs 516-542 per share.
Rainbow Children's Medicare is one of the largest multi-speciality paediatric care providers (by hospital beds) with a presence across various specialities such as neurology, nephrology, gastroenterology, oncology and cardiology.
The paediatric healthcare market is expected to grow by 13-14 percent over FY20-26. "We believe Rainbow Children's Medicare with its paediatrics focused operations and its clinical expertise in managing complex diseases is well placed to benefit from growth in the market," said Rajnath Yadav of Choice Broking.
At the higher end of the IPO price band, "the company is demanding a TTM P/E (trailing twelve months price to earnings) multiple of 43.2x (to its TTM earnings per share of Rs 12.5) which is slightly premium to the peer average of 38.1x. Thus, we assign a “subscribe with caution” rating for the issue," said Yadav.
As of December 2021, it operated 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500.
It has entered into a memorandum of understanding to set up two hospitals in Hyderabad and one in Chennai. Additionally, it is planning to add two hospitals in Bengaluru and one in NCR. Cumulatively, over 1,250 hospital beds are expected to be added by FY25.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.