Rainbow Children’s Medicare Limited IPO

Rainbow Children’s Medicare Limited

Rs.14,634 / 27 shares
Minimum Investment

IPO Details:

IPO date:
27th April to 29th April, 2022

Issue size:
Rs. 1,580.85 crores

Listing at:
BSE & NSE

Retail quota:
35%

IPO price:
Rs 516 - Rs 542 per equity share

Minimum lot size:
27 equity shares and in multiples of 27 thereafter

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Company Background

Rainbow Children’s Medicare Limited is a leading multi-specialty pediatric and obstetrics and gynecology hospital chain in India, operating 14 hospitals and 3 clinics in six cities, with a total bed capacity of 1,500 beds, as of September 30, 2021. According to CRISIL, the company had the highest number of hospital beds amongst comparable players in the maternity and pediatric healthcare delivery sector, as of March 31, 2021.

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The company’s core specialties are pediatrics, which includes newborn and pediatric intensive care, pediatric multi-specialty services, pediatric quaternary care (including multi organ transplants); and obstetrics and gynecology, which includes normal and complex obstetric care, multi-disciplinary fetal care, perinatal genetic and fertility care. As of September 30, 2021, the company had 602 full-time doctors and 1,686 part time/visiting doctors. A number of their doctors in neonatal, pediatric intensive care, pediatric sub specialties, obstetrics and gynecology are trained or possess qualifications from the United Kingdom, United States, Canada and Australia, which provides the company a competitive advantage.

Rainbow Children’s Medicare has expanded its hospital network and increased its bed capacity from 1,162 beds as of March 31, 2019 to 1,500 beds as of September 30, 2021. Over the same period, it also increased the number of hospitals from 10 to 14.

Let us now look at a few competitive strengths and strategies of Rainbow Children’s Medicare...

Competitive Strengths

+ Ability to Conceptualize, Create and Operate Specialized Children’s Hospitals: Rainbow Children’s Medicare’s specialization in pediatric care and its ability to conceptualize, create and operate children’s hospitals are critical to the company’s success. The company’s founding Promoter and senior consultants, who were trained in children’s hospitals in the United Kingdom, United States, Canada and Australia believe that a children’s hospital requires a children centric approach towards making the atmosphere congenial and enabling faster healing of children suffering from acute or prolonged illness. This is one of the key factors that the company focuses on as it conceptualizes and builds all of its hospitals. Keeping the children centric atmosphere in its hospitals has been one of the biggest differentiators and a key factor of the company’s success. In the company’s experience, children getting treated at its hospitals become comfortable with the setting, as opposed to being apprehensive.

+ Leading Pediatric Multi-Specialty Healthcare Chain with Strong Clinical Expertise in Managing Complex Diseases: Rainbow Children’s Medicare is one of India’s largest multi-specialty pediatric care providers (based on hospital beds, as of March 31, 2021), with a presence across various specialties such as neurology, nephrology, gastroenterology, oncology and cardiology. The company has built a comprehensive pediatric critical care program and has consistently allocated approximately one-third of their operational beds at all their hospitals to critical care. In addition, it has established advanced neonatal and pediatric intensive care services across its hospitals. Rainbow Children’s Medicare Limited provides complex multi-specialty tertiary intensive care at their hub hospitals, which provides them with a significant competitive advantage. According to a CRISIL Report, the company is one of very few standalone pediatric multi-specialty hospital chains in south India.

+ Comprehensive Perinatal Care Provider, with Synergies Between Pediatric and Obstetrics and Gynecology Services: In the initial years of corporate history, the company focused on establishing its capabilities and reputation as a leading provider of pediatric care. As its pediatric operations grew, the company realized that many pregnancies require deliveries in a comprehensive perinatal ecosystem, to address incidents of high-risk pregnancies, babies requiring immediate surgical interventions and other neonatal interventions right after birth. As a result, they leveraged their Rainbow brand, which was already well recognized in pediatrics, to expand into obstetrics and gynecology in 2007 and offer comprehensive perinatal services. Their ability to offer integrated pediatric, along with obstetric and gynecologic services, enables them to provide very effective and cost-efficient one-stop healthcare solutions to families.

+ Strong Track Record of Growth, Operational, and Financial Performance: Rainbow Children’s Medicare has grown its bed capacity from 50 beds in a single hospital in 1999 to 1,500 beds across 14 hospitals as of September 30, 2021. During the first decade of operations, they focused on creating the right treatment protocols, right doctor engagement model and the appropriate business model. Post this phase, the company focused on growing the number of hospitals and bed capacity at its hospitals. Over the last six years, the company has added 985 beds across 10 hospitals and has expanded its presence from two cities to six cities. The company has also followed a financially disciplined model, focusing on cost-effective growth. All their capital investments are carefully deliberated and approved by their experienced Board of Directors. The company has also delivered strong operating and financial performance across its hospital network. Given the growth witnessed in its existing projects, coupled with the strategy of phasing out new projects, the company has been able to deliver continuous profitability.

+ Experienced Senior Management Team with Strong Institutional Shareholder Support : The company’s management team comprises of qualified and experienced professionals. As per the company, the management team’s vision, leadership, focus on patient care and adherence to strong corporate governance policies have contributed to strong performance in the past and will drive the strategic direction in future. The company’s senior management team is led by Dr. Ramesh Kancharla, founding Promoter, Chairman and Managing Director. He has over 23 years of experience in the United Kingdom and India in the field of pediatrics, pediatric gastroenterology, liver diseases and liver transplantation. Dr. Dinesh Kumar Chirla, one of the Promoters and Whole-time Director, is a trained neonatologist. He has worked in children’s hospitals in Australia and United Kingdom for seven years. He has strong clinical and managerial skills, and has helped to build the intensive care services at the hospitals to the highest standards. Rainbow Children’s Medicare’s financial investors include CDC, UK’s development finance institution, which has over 70 years of experience investing in emerging markets. CDC has 30.45% shareholding in the company and has supported in driving growth and improving access to healthcare for their patients and guiding on environmental, social and governance (“ESG”) initiatives.

Key Strategies

Here are a few strategies Rainbow Children’s Medicare Limited has for its business:

Strengthen tertiary and quaternary pediatric services in its existing hospitals
Further grow its comprehensive perinatal services offered under “Birthright by Rainbow”
Grow its presence through hub and spoke networks across key geographic clusters and new locations
Initiatives to drive performance efficiencies
Digital healthcare initiatives to address patient convenience, operational efficiencies, and expand reach

Key Financials

And finally here’s a look at key financials of Rainbow Children’s Medicare Ltd...

Revenue from operations

Particulars (in Rs. million)

Particulars (in Rs. million)

How to apply for an IPO?

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Rainbow Children’s Medicare Limited FAQs

The Rainbow Children’s Medicare Limited IPO has an issue size of Rs. 1580.85 crores. The IPO opens for subscription on 27th April, 2022, and ends on 29th April, 2022.

Yet to be announced

KFin Technologies Limited (formerly known as KFin Technologies Private Limited) is the registrar for this IPO.

The dates are yet to be decided.

You can read more about Rainbow Children’s Medicare Limited and its IPO from the company’s red herring prospectus (RHP) here.