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IPO Alert: Rainbow Children’s Medicare Limited files for initial public offering

The estimated size of the hospital market in India was ₹4,270 billion in the fiscal year 2020, representing an annual growth of 13% since 2016.

The country’s maternity care market has seen a growth of 8% between the financial years 2016 and 2020. It is expected to grow by 7-8% through 2026, supported by an estimated11-12% growth in the private segment during that period.

Rainbow Children’s Medicare Ltd recently filed preliminary papers with capital markets regulator SEBI to raise over ₹2,000 crores through an initial public offering.

The public issue comprises a fresh issue of equity shares aggregating up to ₹280 crores and an offer for sale of up to 2.4 crore shares by the selling shareholders, according to the draft red herring prospectus. The offer also includes a reservation for subscriptions by eligible employees.

Rainbow Medicare plans to utilize ₹40 crores from the net proceeds towards the early redemption of its NCDs in full. The company would use ₹170 crores for setting up new hospitals and purchasing medical equipment. The remaining amount would be used for general corporate purposes.

Multi-specialty Hospital

Rainbow Children’s Medicare is a multi-speciality pediatric and obstetrics & gynaecology hospital chain in India, operating 14 hospitals and three clinics in six cities, with a total capacity of 1,500 beds, as of September 2021.

The Hyderabad-based hospital chain, which was started in 1999, is backed by UK-based development finance institution CDC Group plc.

Rainbow Medicare’s core specialities are paediatrics, which includes newborn & pediatric intensive care, pediatric multi-speciality services, pediatric quaternary care and obstetrics & gynaecology, which includes normal and complex obstetric care, multi-disciplinary fetal care, perinatal genetic and fertility care.

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