Rainbow Children's Medicare's IPO subscribed 12.4x on institutional push

Institutional demand for IPOs of both Rainbow Medicare and Campus Activewear, which closed this week, have been strong. Experts say this is a healthy sign for LIC's IPO, which opens next week

The initial public offering (IPO) of Rainbow Children's Medicare, a multi-speciality pediatric hospital chain, saw 12 times more demand than shares on offer.

The institutional investor portion of the issue was subscribed 38.9 times, high networth individual portion garnered 3.73 times subscription and the retail portion was subscribed 1.4 times.

The institutional demand for both the IPOs of Rainbow Medicare and Campus Activewear, which closed this week, have been strong. Experts say this is a healthy sign for LIC’s IPO, which opens next week.

Hyderabad-based Rainbow Medicare raised Rs 280 crore from the IPO. The issue also consisted of secondary share sale worth Rs 1,300 crore. At Rs 542 per share—the top-end of the price band, the company will have a market cap of Rs 5,501 crore on a post-diluted basis.

The issue was priced at 43 times the company’s trailing 12-month (Dec 21) earnings. Analysts said this was attractive compared to peers such as Apollo Hospital Enterprise and Fortis Healthcare, which are trading at price-to-earnings multiples of 77 times and 57 times, respectively.