Ahead of IPO, Rainbow Children’s Medicare collects Rs 470 crore from anchor investors

Multi-speciality pediatric hospital chain Rainbow Children’s Medicare Ltd on Tuesday said it has garnered nearly Rs 470 crore from anchor investors ahead of its initial public offering (IPO).

The company has decided to allocate a total of 8,663,404 equity shares to anchor investors at Rs 542 apiece, taking the transaction size to Rs 469.55 crore, according to a circular uploaded on BSE website.

Government of Singapore, Monetary Authority of Singapore, Amansa Holdings, Goldman Sachs (Singapore) Pte and IIFL Special Opportunities Fund are among the anchor investors.

In addition, shares have been allocated to Bajaj Allianz Life Insurance Company, Max Life Insurance Company, HDFC Life Insurance Company, SBI Mutual Fund (MF), Axis MF, Nippon India MF, DSP MF, Aditya Birla Sun Life MF, UTI MF, HSBC MF and Motilal Oswal MF in the anchor round.

The public issue comprises a fresh issue of equity shares aggregating up to Rs 280 crore and an offer sale (OFS) of up to 2.4 crore equity shares by promoters and investors.

Those selling shares in the OFS are promoters — Ramesh Kancharla, Dinesh Kumar Chirla and Adarsh Kancharla, promoter group entity Padma Kancharla and investors — British International Investment plc (formerly CDC Group plc) and CDC India.

The issue, with a price band of Rs 516-542 a share, will be open for public subscription during April 27-29. 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 (NCDs) issued by the company in full; capital expenditure towards setting up of new hospitals and purchase of medical equipment; and general corporate purposes.

Half of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.

The offer also includes a reservation of up to 3 lakh shares for employees, who will receive shares at a discount of Rs 20 to the final offer price.

Investors can bid for a minimum of 27 equity shares and in multiples thereof.

Rainbow, backed by UK-based development finance institution CDC Group plc, established its first 50-bed pediatric speciality hospital in 1999 in Hyderabad.

Since then, it has established its reputation as a leader in multi-speciality pediatric services, with strong clinical expertise in managing complex diseases.

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.

Kotak Mahindra Capital Company, JP Morgan India and IIFL Securities are the book running lead managers to the issue. The equity shares are proposed to be listed on BSE and NSE.