Rainbow Medicare IPO subscribed 55% on second day of issue

The institutional portion was subscribed by 10 per cent, the retail investor portion by 82 per cent

The initial public offering (IPO) of Rainbow Medicare was subscribed 55 per cent on Thursday, the second day of the offer. 

The institutional portion was subscribed by 10 per cent, the wealthy investor portion by 56 per cent, the retail investor portion by 82 per cent, and the portion reserved for employees by 14 per cent. 

Brokerages such as ICICI Direct, Ashika and Marwadi Financial have issued a ‘subscribe’ rating on the IPO. 

"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 the 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.

The IPO received bids for 1,12,62,753 shares against 2,05,14,617 shares on offer, according to NSE data. The offer, comprising fresh issue aggregating up to Rs 280 crore and an offer for sale of up to 2,40,00,900 equity shares, has a price range of Rs 516-542 apiece.

On Tuesday, the multi-speciality pediatric hospital chain said it garnered nearly Rs 470 crore from anchor investors. At the upper end of the price band, the IPO is expected to fetch Rs 1,581 crore.

The company proposes to utilise the net proceeds from the fresh issue for early redemption of non-convertible debentures in full, capital expenditure towards setting up of new hospitals and purchase of medical equipment, and general corporate purposes, PTI reported.