Rainbow Medicare raises Rs 470 cr from anchor investors ahead of IPO

Multi-specialty hospital chain Rainbow Children’s Medicare on Tuesday alloted shares worth Rs 470 crore to anchor investors. Close to 8.7 million shares were alloted to 36 institutional investors at Rs 542 per share, the upper end of the price band.

The Government of Singapore, SBI Mutual Fund, Axis Mutual Fund, Neuberger and HDFC Life are some of investors to get allotment in the anchor category.

The Hyderabad-based Rainbow Medicare is looking to raise Rs 280 crore by selling new shares in the IPO. The rest of the issue  comprises of secondary share sale worth Rs 1,300 crore. At the top-end of the price band, the company will have a market cap of Rs 5,501 crore.

"Considering the trailing 12-month (Dec 21) EPS of Rs 12.56 on a post issue basis, the company is going to list at a P/E of 43.16 times  whereas its peers namely Apollo Hospital Enterprise and Fortis Healthcare are trading at PE of 77.3x and 56.9x respectively. We assign “Subscribe” rating to this IPO as the company is a leading pediatric multi-specialty healthcare chain with strong clinical expertise in managing complex diseases. Also, it is available at reasonable valuation as compared to its peers," said a note by Marwadi Financial Services.