Geojit IPO report on Rainbow Children’s Medicare
Rainbow Children’s Medicare Ltd (RCML) incorporated on August 7,1998 is a leading multi-specialty paediatric and obstetrics and gynaecology hospital chain in India, operating 14 hospitals and three clinics in six cities. RCML’s core specialities are paediatrics, which includes newborn and paediatric intensive care, paediatric multispecialty services, paediatric quaternary care (including multi organ transplants); and obstetrics and gynaecology, which includes normal and complex obstetric care, multi-disciplinary fetal care, perinatal genetic and fertility care. As of December 31, 2021, RMCL has 641 full-time doctors and 1,947 part-time/visiting doctors. RCML is backed by UK’s development finance institution CDC (~holds ~30.5% shares of RCML).
Valuation and Outlook
At the upper price band of Rs.542, RCML is priced at 32.6x (FY22E annualized) which appears to be reasonably priced compared to its peers. Hence, we assign a “Subscribe” rating for the issue on a short to medium term basis considering its strong financial performance both topline and bottom-line, improving margins, focus on child-care services and growing preference for specialty maternity hospitals.
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