Rainbow Childrens Medicare tanks 17%, closes at Rs 450 in debut trade

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Rainbow Children's Medicare  disappointed investors on the first trading day, ended 17 percent lower than the issue price on May 10, as the market again closed in the red.

The Indian market has been under pressure for more than a month now, and lost over 5 percent since last week due to weak global cues and growth concerns.

Rainbow Children's opened at Rs 506, down 6.6 percent from the issue price of Rs 542 on the BSE and remained under pressure throughout the session. It sank to Rs 421 before closing with a 17 percent loss at Rs 450.10.

"The company's muted listing can be attributed to volatile and negative market sentiments and a lack of investor interest in hospital businesses," Santosh Meena, Head of Research at Swastika Investmart, said.

Also read: As Rainbow Children's Medicare skids on debut, what should investors do now?

The multi-specialty paediatric, obstetrics and gynaecology hospital chain operator has a specialised business, an experienced management team, proven ability to attract, train and retain high-calibre medical professionals. But, " hospital is a highly competitive business and normalisation of profitability post Covid makes it suitable only for aggressive investors for the long term," Meena said.

Rainbow Children's Medicare traded with volume of 1.73 crore equity shares on the National Stock Exchange and 9.19 lakh shares on the BSE.

The south-based firm, which operates 14 hospitals with a capacity of 1,500 beds as of December 2021, raised Rs 1,581 crore through its public issue that comprised a fresh issue of Rs 280 crore and an offer for sale of Rs 1,301 crore.

The price band for the public issue was Rs 516-542 a share.