Rainbow Children’s Medicare makes a weak debut on exchanges as it lists at a 6% discount

• Shares of Rainbow Children’s Medicare listed at ₹506, which is at a discount of 6% when compared to the issue price of ₹516.
• The IPO of the Hyderabad-based chain of paediatric hospitals witnessed decent demand from investors as it was subscribed 12.43 times.
• The market capitalisation of the company stood at ₹5,135 crore.

Shares of the Hyderabad-based chain of paediatric hospitals, Rainbow Children's Medicare made a tepid listing on the Nifty and Sensex with a 6% below the issue price of ₹516 apiece.

Post-listing, the market capitalisation of the company stood at ₹5,135 crore, according to BSE data.

The shares of the company underperformed market expectations as the grey market premium, indicated a premium of ₹15 per share. However, investor wealth is now down by 6% in the first hour of listing. Weak market sentiments and concerns about further rate hikes to tame inflation around the world are likely to have contributed to the weak listing.

The IPO was open between April 27 to April 29 ⁠and was oversubscribed 12.43 times by investors.

Understanding Rainbow Children’s Medicare’s business

The multi-specialty paediatric, obstetrics and gynaecology hospital chain operates 14 hospitals and three clinics in six cities, with a total bed capacity of 1,500 beds.

The hospital chain has 602 full-time doctors and 1,686 part-time and visiting doctors. The firm believes in a full-time doctor model for high degree of patient satisfaction.

Going forward, it seeks to expand the hospital network and is in the process of building a digital healthcare delivery solution that enables healthcare delivery irrespective of geography.

Most analysts have recommended subscribing to the IPO because of a focused children-centric approach and decent valuation.

The discounted listing gains were on expected lines as analysts expected a soft opening of shares.

“Overall, we expect a soft listing of Rainbow Children’s Medicare Limited IPO and we suggest retail investors book profit who got the allotment and long-term investors can wait for a lower price,” said Yash Gupta- Equity Research Analyst at Angel One.


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