Rainbow Children’s Hospital is ramping up capacity with a Rs.900-crore expansion plan to add nearly 900 beds by FY29, anchored by a 325-bed hub and 125-bed spoke in Gurugram. The move marks the South-based pediatric and maternity care leader’s biggest push into North India, where birth rates remain high and a huge gap exists for a dedicated multi-speciality children's hospital.
“North India is where the future demand lies, 60% of India’s 28.5 million annual births happen in UP, Bihar, Rajasthan and Haryana,” said Dr. Ramesh Kancharla, Chairman and MD in an interview to Moneycontrol on Thursday. “We want to position Gurgaon as a national referral centre for complex pediatric care.”
The company, already India’s largest pediatric and maternity chain with 22 hospitals and 2,285 beds, plans to scale to 3,165 beds by FY29.
The centrepiece is a 325-bed greenfield hub hospital in Gurugram, backed by a 125-bed spoke, along with new facilities in Pune and Coimbatore, and deeper penetration in Hyderabad, Bengaluru and Chennai.
Rainbow recently acquired Pratiksha Hospital in Guwahati, marking its entry into the Northeast, where Kancharla sees “a huge underserved market.”
Rainbow’s expansion is fully funded through internal accruals. “We are absolutely debt-free,” Kancharla says. “With Rs.550 crore cash on the balance sheet and annual generation of Rs.250–300 crore, we don’t need external borrowing.”
He added that equity fundraising would only be considered for a large acquisition or a major strategic event:
“Thankfully, unless we decide one day to acquire some larger chain or something, we may need more funding. Otherwise, our 300–400 bed annual run rate can be funded internally.”
Greenfield projects cost Rs.1.75–2 crore per bed, while spokes come at Rs.70 lakh per bed, enabling a hybrid model that balances scale with financial prudence.
Hub & spoke model
The strategic thrust remains Rainbow’s hub-and-spoke model, which Kancharla calls “the most successful in pediatric healthcare.” Hubs deliver quaternary care—liver and kidney transplants, cardiac surgeries—while spokes provide NICU, emergency and maternity services.
“Children’s hospitals don’t work on star doctors,” he says. “It’s about building systems and multidisciplinary teams.”
Rainbow is also betting on specialty depth. “By 2029, Hyderabad, Bengaluru, Chennai and NCR will offer everything—from common ailments to heart and liver transplants,” Kancharla says. The group already performs 30–35 pediatric liver transplants annually and 600 complex heart surgeries in Hyderabad, and aims to replicate that in other metros.
Market dynamics are shifting. Falling birth rates in South India contrast with rising demand for premium care for single children. “When families have one child, they invest more in quality care,” Kancharla notes. Pediatric services contribute 70% of Rainbow’s revenue, with maternity at 30%, both growing steadily.
Disease patterns are evolving too. “Diarrhea and malaria have declined thanks to vaccines and hygiene,” Kancharla says. “But autoimmune disorders, respiratory issues from pollution, and childhood cancers are rising. Diagnostics have improved, so rare diseases are no longer rare.”
Rainbow posted Rs.797.7 crore revenue in H1 FY26, up 7 percent YoY, with EBITDA margins at 31 percent. Insurance penetration is improving—now 52 percent of inpatient revenue—but out-of-pocket spend remains high in tier-2 markets.
“Our goal is simple,” Kancharla says. “No child should suffer for lack of a dedicated hospital.”
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