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Rainbow Children’s Medicare shares list at discount to IPO price, down 6.6% on stock market debut

Rainbow Children’s Medicare shares made a tepid listing on the stock exchanges on Tuesday, amid bearish market momentum.

Rainbow Children's Medicare
The overall market sentiment was negative as BSE Sensex and NSE Nifty 50 were down in the red.

Rainbow Children’s Medicare shares made a tepid listing on the stock exchanges on Tuesday, amid bearish market momentum. Shares of Rainbow Children’s Medicare began trading at Rs 506 per share, down 6.6 per cent or Rs 36 from the upper end of IPO price band of Rs 542 per share. At the time of listing, the market capitalisation of the company stood at Rs 5,135.99 crore. The overall market sentiment was negative as BSE Sensex and NSE Nifty 50 were down in the red. The IPO was subscribed 12.43 times with all investor categories oversubscribing their portion of the issue.

Upon successful listing, Rainbow Children’s Medicare has joined the likes of Max Healthcare Institute, Krishna Institute of Medical Sciences, Apollo Hospitals Enterprise, Narayana Hrudayalaya, and Fortis Healthcare. The company is significantly dependent on certain specialities for a majority of its revenues. It has four core specialities, namely secondary pediatric care, tertiary pediatric care, quaternary pediatric care and women care (gynecology, obstetrics, and related services.

The IPO shares were sold at a price range of Rs 516-542 per share. Analysts at ICICI Direct said that it will be key for Rainbow to sustain its growth trajectory amid increased consolidation in healthcare space and margin profile. 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.

In the period from April 1, 2020 to March 31, 2021, driven in part by the movement restrictions arising out of the COVID-19 pandemic, it conducted over 125,000 outpatient video consultations through its video consultation platform. Analysts at HDFC Securities had said in a IPO note that there is potential to establish a hybrid model of healthcare delivery, which allows Rainbow Children’s Medicare to provide outpatient consultations through virtual means and subsequent inpatient admissions, if needed, at its network hospitals. It is in the process of building a digital healthcare delivery solution that enables healthcare delivery irrespective of geography.

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