10 May , 2022 By : Kanchan Joshi
Shares of Rainbow Children's Medicare on Tuesday made stock market debut by listing at a discount of nearly 7% against the IPO issue price of Rs542 per share. It has further tanked to Rs462 apiece on the BSE in afternoon deals.
“The company’s muted listing can be attributed to volatile and negative market sentiments and a lack of investor interest in hospital businesses. Hospital is a highly competitive business and normalization of profitability post covid makes it suitable only for aggressive investors for the long term. Those who applied for listing gains can maintain a stop loss of Rs500," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The three-day initial public offering (IPO) of Rainbow Children's Medicare Limited had opened for subscription on April 27 and conclude on April 29. The issue was oversubscribed by 12.43 times on the last day of the bidding, driven by qualified institutional buyers (QIB).
“The Rainbow Children’s IPO received a tepid response from non-institutional buyers and retail investors. The overall market is currently in negative zone which will further put pressure on the stock. We expect the counter to undergo further correction to Rs450 levels in the near term," said Ravi Singh, Vice President and Head of Research at Share India.
The IPO, comprised fresh issue aggregating up to Rs280 crore and an offer for sale of up to 2,40,00,900 equity shares, had a price range of Rs516-542 apiece.
Rainbow Childrens Medicare, backed by UK-based development finance institution CDC Group plc, established its first 50-bed pediatric speciality hospital in 1999 in Hyderabad. As of December 20, 2021, Rainbow operates 14 hospitals and three clinics in six cities in India, with a total bed capacity of 1,500 beds.
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