The subscription period for the initial public offering (IPO) will begin on April 27 and end on April 29. On April 26, anchor investors can participate in the offer for one day.
In collaboration with merchant bankers, the business has set the price range for the offer at Rs 516 to Rs 542 per equity share.
The company plans to raise Rs 1,580.84 crore through a public offering at the top of the pricing range. The IPO consists of a fresh issue of shares worth Rs 280 crore and an offer-for-sale (OFS) by promoters and investors of up to 2.4 crore equity shares.
Ramesh Kancharla, Dinesh Kumar Chirla, and Adarsh Kancharla, the company's promoters, would sell a total of 87.26 lakh equity shares via the OFS. The OFS would offer 1.46 crore equity shares to investors British International Investment Plc (previously known as CDC Group Plc) and CDC India.
Out of the total offer, the company has set aside three lakh equity shares for its employees, who would receive them at a discount of Rs 20 per share over the final issue price.
Rainbow will use Rs 40 crore of the net fresh issue proceeds to redeem its NCDs, and Rs 170 crore to build additional hospitals and buy medical equipment. The proceeds from the OFS will be distributed to the selling shareholders.
The company has set aside half of its public offering for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors to subscribe.
Investors would need to apply for a minimum of 27 equity shares, and then in multiples of 27 shares after that. As a result, the least investment by retail investors for a single lot (27 shares) would be Rs 14,634 and the highest investment in 13 lots would be Rs 1,90,242, as retail investors are only authorised to spend up to Rs 2 lakh.
Rainbow began as a 50-bed paediatric hospital in Hyderabad, Telangana, in 1999, under the guidance of Dr. Ramesh Kancharla, the original proponent, to meet the need for child healthcare. In India, it currently runs a multi-specialty paediatric and obstetrics and gynaecology hospital chain with 14 hospitals and three clinics in six cities. As of December 2021, it had a total bed capacity of 1,500 beds, with 641 full-time doctors and 1,947 part-time/visiting doctors.
It may seek to grow its hospital network in the future by acquiring brownfield assets or developing greenfield sites.
In Hyderabad, Telangana, the company claims to have successfully implemented a hub-and-spoke strategy. It is also implementing a similar hub-and-spoke concept in Bengaluru, Karnataka, and wants to replicate this approach by adding spokes in Chennai, Tamil Nadu, and New Delhi-NCR, where it has hub hospitals.
The paediatric healthcare market in India is expected to grow at a CAGR of 13% from Rs 1.01 lakh crore in March 2021 to Rs 2.1 lakh crore by the end of financial year 2026, according to CRISIL Research, while the maternity healthcare market is expected to grow at a CAGR of 9.42 percent from Rs 37,800 crore in FY21 to Rs 59,300 crore in FY26.
The gynaecology hospital chain's earnings increased by 228 percent year over year to Rs 126.4 crore in the nine months ending December 2021, while revenue increased by 56.6 percent to Rs 761 crore.
However, profit for the fiscal year ended March 2021 fell 28.5 percent to Rs 39.57 crore from the previous year, while sales fell 9.6 percent to Rs 650 crore.
On a consolidated basis, its borrowings (current and non-current) totaled Rs 40.68 crore as of December 2021.
Dr. Ramesh Kancharla, the company's promoter, is the Chairman and Managing Director, with over 23 years of expertise in paediatrics, paediatric gastroenterology, liver disorders, and liver transplantation in the United Kingdom and India.
Dr. Dinesh Kumar Chirla, a certified neonatologist, is the other promoter on the board of directors. Head of Strategy Mahesh Madduri is a Chartered Accountant with a Master of Science in Industrial Administration from Carnegie Mellon University in Pittsburgh, Pennsylvania. Dr. Rohit Manipal Bhojaraj, Chief Operating Officer, is a certified physician and management professional with over 16 years of experience in the global healthcare sector, having graduated from the Indian Institute of Management in Ahmedabad.
Gowrisankar R, Chief Financial Officer, is a Chartered Accountant with over two decades of financial and accounting experience in the Indian healthcare industry.
Promoters owned 62.19 percent of the company's stock. Rainbow is sponsored by financial investor CDC, the UK's development financing agency, which owns 30.45% of the company's shares.
Rainbow will complete its IPO share allotment by May 5, and refunds will be credited to unsuccessful investors' bank accounts by May 6. By May 6, equity shares will be credited to qualifying investors' demat accounts.
On May 10, equity shares will be listed on the BSE and NSE for the first time.
The issue's book-running lead managers are Kotak Mahindra Capital Company, JP Morgan India, and IIFL Securities, while the registrar is KFin Technologies.
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