Rainbow Children’s Medicare IPO: Issue Date, Price, Allotment, Review & Details

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WHY SUBSCRIBE TO Rainbow Children’s Medicare Ltd IPO

Rainbow Children’s Medicare Limited is a number one
multi-specialty pediatric and obstetrics and gynecology hospital chain
in India, operating 14 hospitals and three clinics in six cities, with a
total bed capability of 1,500 beds, as of December 31, 2021. According
to the CRISIL Report (which was commissioned and paid for by the
Company in relation to the Offer), the corporate had the best
variety of hospital beds amongst comparable players within the
maternity and pediatric healthcare delivery sector, as of March 31,
2021. Its core specialties are pediatrics, which incorporates newborn and
pediatric intensive care, pediatric multi-specialty services, pediatric
quaternary care (including multi organ transplants); and obstetrics
and gynecology, which incorporates normal and sophisticated obstetric care,
multi-disciplinary fetal care, perinatal genetic and fertility care. The
company has established its popularity as a pacesetter in multi-specialty
pediatric services, with strong clinical expertise in managing complex
diseases. The corporate has also expanded its operations to incorporate
obstetrics and gynecology services, whereby they provide
comprehensive perinatal services to patients.

Objects of the Offer :

The Offer comprises of a Fresh Issue and a proposal
on the market. The Fresh Issue aggregates as much as ₹2,800 million, while the
offer on the market is of 24,000,900 equity shares. Out of the online proceeds
from the fresh issue, ₹400 million can be used for Early redemption
of NCDs issued by the Company to CDC Emerging Markets Limited
(“CDCEML”) in full, while ₹1,700 million can be used for Capital
expenditure towards establishing of recent hospitals and buy of
medical equipment for such recent hospitals and the balance can be
utilized towards general corporate purposes.

Rainbow Children’s Medicare ltd IPO ANALYSIS

Consistent track record of monetary performance:

The corporate’s revenue from operations has
increased from ₹5,427.92 million in Fiscal 2019 to ₹6,500.47 million
in Fiscal 2021. The corporate’s EBITDA increased from ₹1,568.66 million Fiscal 2019 to ₹1,730.97 million in Fiscal 2021 while PAT decreased from ₹445.90 million in Fiscal 2019 to ₹395.68 million in Fiscal 2021. Nonetheless, the 9 Month Ending December 2021 PAT has risen
to ₹1,264.13 million.

CONSOLIDATED FINANCIAL SUMMAry of Rainbow Children’s Medicare

(`₹ in Thousands and thousands) FY19 FY20 FY21 9M ended Dec 2020 9M ended Dec 2021
Revenue from Operations 5,427.92 7,193.91 6,500.47 4,861.71 7,613.11
EBITDA 1,568.66 2,073.73 1,730.97 1,386.65 2,694.93
PAT 445.90 553.40 395.68 385.25 1,264.13
EPS (₹) 4.83 5.98 4.36 4.22* 13.39*
ROE 12.01% 13.68% 8.88% 8.68% 21.45%
Shareholding (%) Pre IPO
Promoter and Promoter Group 62.19%
Public 37.81%
Share Reservation Net Issue (%)
QIB 50
NII 15
Retail 35
Company Leadership
Dr. Ramesh Kancharla Chairman and Managing Director
Dr. Dinesh Kumar Chirla Whole-Time Director
R Gowrisankar CFO
Issue Managers
BRLMs Kotak Mahindra Capital Company Limited, J.P. Morgan India Private Limited, IIFL Securities Limited
Registrar Kfin Technologies Private Limited
Issue Details
Face Value ₹ 10
Price Band
Issue Size ₹ crores
Bid lot Equity Shares
Lot size shares
Issue Type 100% Book constructing

Competitive Strength:

Ability to conceptualize, create and operate specialized children’s hospitals

Rainbow Children’s Medicare Limited specialization in pediatric care and the power to conceptualize,
create and operate children’s hospitals are critical to its success. The corporate allocates a
significant proportion of its capital expenditure towards the interiors of its hospitals so as to make
the environment congenial for youngsters. One in all the largest differentiators of its hospital from adult
hospitals is the youngsters centric atmosphere. Its children’s hospitals are made vibrant and visually
appealing, with shiny and congenial interior decoration. Each of its hospitals also has a delegated
child play area and other entertainment within the patient rooms which comforts the youngsters recovering
from treatment. Further, a children’s hospital requires give attention to psychological and emotional care,
which is different from adult hospitals, and it keep this understanding on the forefront while treating
children. The corporate has realized that keeping the youngsters centric atmosphere in its hospitals has
been one in every of the largest differentiators and a key factor of its success.

Leading pediatric multi-specialty healthcare chain with strong clinical expertise in managing complex diseases

Rainbow Children’s Medicare Limited is one in every of India’s largest multi-specialty pediatric care providers
(based on hospital beds, as of March 31, 2021), with a presence across various specialties similar to
neurology, nephrology, gastroenterology, oncology and cardiology. The corporate has built a comprehensive pediatric critical care program and have consistently allocated roughly one-third
of its operational beds in any respect its hospitals to critical care. As well as, the corporate has established
advanced neonatal and pediatric intensive care services across its hospitals. It provides complex
multi-specialty tertiary intensive care at its hub hospitals, which provides the corporate with a big competitive advantage. In response to the CRISIL Report it is assessed as a standalone pediatric
multi-specialty hospital chain and one in every of the few pediatric focused hospital chains in south India.

Comprehensive perinatal care provider, with synergies between pediatric and obstetrics and gynecology services

As its pediatric operations grew, Rainbow Children’s Medicare Limited realized that many pregnancies require deliveries in a comprehensive perinatal ecosystem, to deal with incidents of high-risk
pregnancies, babies requiring immediate surgical interventions and other neonatal interventions
right after birth. Consequently, the corporate leveraged its Rainbow brand, which was already well recognized in pediatrics, to expand into obstetrics and gynecology in 2007 and offer comprehensive
perinatal services. The corporate’s ability to supply integrated pediatric, together with its obstetric and
gynecologic services, enables it to offer very effective and cost-efficient one-stop healthcare solutions to families. The corporate believes this is basically attributable to the synergies between its
pediatric care and its obstetrics and gynecology services. The corporate’s perinatology division (covering maternal medicine, obstetrics, fertility, fetal medicine and neonatology) has worked cohesively
through the years to optimize outcomes in lots of high-risk pregnancies similar to multiple pregnancies,
extreme prematurity, surgically correctible fetal anomalies and growth restrictions. This robust
model of care has made an enormous positive impact on outcomes for its patients.

Hub-and-spoke model that gives synergies and ensures higher care and access for patients

Rainbow Children’s Medicare Limited has successfully executed a hub-and-spoke model at Hyderabad, Telangana with its Banjara Hills hospital (comprising 250 beds) being the hub that’s complemented by 4 spokes at 4 locations in Hyderabad, Telangana namely Secunderabad, LB Nagar,
Kondapur and Hydernagar. At its hub hospital, the corporate provides comprehensive outpatient and
inpatient care with a give attention to tertiary and quaternary care and, at its spokes, it provides secondary
care in pediatric, obstetrics and gynecology and emergency services. Under this model, its superspecialty doctors based at its hub hospital are capable of reach out to the larger community and canopy
a bigger catchment area. This model has enabled Rainbow Children’s Medicare Limited to evolve
over the past twenty years from a single secondary care hospital in Hyderabad, Telangana to 6
hospitals in the town and as a longtime provider of tertiary and quaternary care services at its hub
hospitals

Proven ability to draw, train and retain high-caliber medical professionals

In response to the CRISIL Report (which was commissioned and paid for by the Company in relation
to the Offer), the pediatric healthcare market in India faces challenges in relation to sourcing and
retaining quality pediatric doctors. Hence, Rainbow Children’s Medicare Limited’s ability to draw,
train and retain seasoned doctors and other medical professionals has been a big contributor to its growth and is critical to its future business prospects. Over time, the corporate has
been capable of attract and retain top quality medical professionals by offering them difficult and
rewarding profession options and growth trajectories. Its established popularity, skilled approach,
sound training systems and appealing profession development opportunities are attractive to medical
professionals. The corporate follows a physician engagement model whereby most of its core specialists work exclusively at its hospitals on a full-time retainer basis. This model ensures that almost all of
the core specialists can be found 24/7 on a roster basis across its hospitals, which is especially
necessary for youngsters’s emergency and neonatal and pediatric intensive care services. The corporate
enters into retainership contracts with its newly hired doctors covering the initial two to a few yr
periods, which provides them with stability and makes it a desirable workplace. The corporate has
successfully adopted the doctor engagement model across its hospitals, which has led to a high
degree of full-time doctor retention (at 81% for the period from April 1, 2019 to March 31, 2021).

Management:

  • Dr. Ramesh Kancharla (Chairman and Managing Director):
    He holds a Bachelor of Medicine and
    Bachelor of Surgery (“MBBS”) from Sri Venkateswara University and a Doctor in Medicine (“MD”) in
    paediatrics from Mangalore University. He’s a member of the Royal Colleges of Physicians of the
    United Kingdom. He has over 23 years of experience with the Company. Prior to establishing the Company, he was related to King’s College Hospital, where he accomplished his specialist training in
    paediatric gastroenterology, hepatology and nutrition.

  • Dr. Dinesh Kumar Chirla ( Whole-time Director):
    He holds a MBBS degree from Marathwada University, Doctor of Medicine in paediatrics from Dr. Babasaheb Ambedkar Marathwada University, Doctor of Medicine in Neonatology from the University of Mumbai. He’s a member of the Royal College
    of Paediatrics and Child Health, London. He’s on the Specialist Register in Neonatology on the Specialist Training Authority of the Medical Royal Colleges, London and was a fellow in Neonatology at
    Mercy Hospital for Women. He has over 18 years of experience within the healthcare industry.

  • R Gowrisankar (CFO):
    He holds a bachelor’s degree in commerce from Bharathidasan University and
    a master’s degree in commerce from Alagappa University. He’s a fellow member of the Institute of
    Chartered Accountants of India. He has been related to the Company for over seven years. He
    has over 21 years of skilled experience.

Risks:

  • Its revenues are highly depending on its hospitals in Hyderabad and Bengaluru. It is usually significantly depending on certain specialties for a majority of its revenues. Any impact on the revenues
    from these hospitals or specialties could materially affect its business.

  • The corporate operates in a regulated industry, and compliance with applicable safety, health, environmental, labor and other regulations, or failure to acquire or renew approvals, licenses, registrations and permits, may adversely affect its business.

  • Failure to take care of and enhance its brand and popularity, and any negative publicity and allegations
    within the media against it, may materially and adversely affect the extent of market recognition of, and
    trust in, its services, which could lead to a cloth antagonistic impact on its business.

  • If the corporate is unable to take care of bed occupancy rates at sufficient levels, it might not have the ability to
    generate adequate returns on its capital investments, which could materially and adversely affect
    its revenue and profitability.

  • The corporate could possibly be exposed to risks regarding the handling of non-public information, including
    medical data.

  • Its insurance coverage may not adequately protect its and this will have an antagonistic effect on its
    business.

  • The corporate faces intense competition from other healthcare service providers. Whether it is unable to
    compete effectively, its business, results of operations and money flows could also be materially and adversely affected.

  • * For complete list of risk aspects kindly seek advice from the Red Herring Prospectus

Strategies going forward:

Strengthen tertiary and quaternary pediatric services in its existing hospitals

Based on its 22 years of experience in operating pediatric hospitals providing tertiary newborn,
pediatric intensive and pediatric sub specialty care, there may be great opportunity for its to expand its
quaternary care operations. The corporate plans to construct similar capabilities in its hospitals in
Bengaluru, Karnataka, Chennai, Tamil Nadu and Recent Delhi- NCR. Further, Rainbow Children’s Heart
Institute is a 110-bed standalone pediatric cardiac center that treats children’s cardiac problems.
The corporate plans to develop similar cardiac capabilities in Bengaluru, Karnataka, Chennai, Tamil
Nadu and Recent Delhi-NCR, by hiring reputed, experienced and expert cardiac specialists in these
cities. It also plans to speculate in specialized medical infrastructure similar to cath labs, pediatric cardiac
OT and echocardiogram machines, which is able to enhance its capabilities in treating cardiac patients

Further grow its comprehensive perinatal services offered under “Birthright by Rainbow”

“Birthright by Rainbow” seeks to be proactive not only in providing protected birthing but in addition in creating
memorable birthing experiences, and has introduced child birth preparation classes with a give attention to
nutrition, lactation and yoga. The expansion of Rainbow Children’s Medicare Limited’s perinatal services
has been driven by the early establishment of such practices. The corporate is within the strategy of
further strengthening its connect with its patients by forming pregnancy support groups and
developing an interactive Birthright mobile application. Going forward, the corporate is concentrated on
providing comprehensive obstetrics and gynecology services in any respect its current and future hospitals,
which is able to help the corporate in enhancing its patient and revenue base. The corporate also plans to
increase its give attention to training and increase its intake of DNB and fellowship programs in obstetrics
and fetal medicine. This is able to increase its pool of middle grade doctors specializing in obstetrics
and gynecology. The corporate further plans to expand its service offering by introducing concepts
similar to trained midwifery in its hospitals.

Grow its presence through hub and spoke networks across key geographic clusters and recent locations

Rainbow Children’s Medicare Limited has successfully created a hub and spoke model in
Hyderabad, Telangana through its network of a hub hospital in Banjara Hills, Hyderabad, Telangana
supported by 4 spokes spread across the town. This model provides patients access to
multidisciplinary level 4 neonatal and pediatric intensive care and pediatric subspecialty care on the
hub hospital while at the identical time providing access to 24/7 emergency, pediatric secondary and
tertiary care and full spectrum of obstetrics and gynecology closer to home on the spokes. The
company consider that the model is financially optimal, as spokes are arrange at lower cost. The
company plans to duplicate this model across key cities and regions within the country. Particularly, the
company plans so as to add additional spokes at Hyderabad, Telangana Bengaluru, Karnataka, Recent DelhiNCR and Chennai, Tamil Nadu. It also plans to extend the capability of its hubs in Recent Delhi-NCR
and Bengaluru, Karnataka. Further, the corporate also exploring options to grow organically in newer
locations in Andhra Pradesh and Tamil Nadu. As well as, it is usually exploring opportunities to expand
in north east India and in neighboring countries. Every so often, it’ll also consider inorganic
growth opportunities.

Initiatives to drive performance efficiencies

Rainbow Children’s Medicare Limited will proceed to explore means to boost performance efficiencies to cut back the fee of healthcare delivery in order to make it inexpensive for patients, and likewise
contribute to the expansion in its profitability. On this regard, it seeks to streamline its procurement processes by specializing in (a) centralized and standardized procurement of medical equipment, consumables and pharmaceuticals; (b) leveraging the dimensions of its operations for more economical
sourcing; and (c) using technology to have real time visibility, assess supplier performance and access other relevant information. The corporate also plan to further reduce the length of hospital stays
as its surgical work is trending towards minimally invasive surgeries, which it believes could have a
helpful impact on its key operational parameters.

Digital healthcare initiatives to deal with patient convenience, operational efficiencies and expand reach

Rainbow Children’s Medicare Limited’s digital strategy is concentrated on enabling its to offer customized healthcare services for its goal customers in addition to to digitize processes to significantly
improve the in-hospital customer experience. As the corporate operates in children and ladies care,
its customers include young independent professionals who’re technology savvy and it consider it
has the chance to construct a deep lasting relationship with such customers spanning from conception to adolescence using digital initiatives. The corporate’s “Rainbow Children’s Hospital” mobile
application is one in every of the core elements of its digital strategy. The appliance enables patients to book
appointments, make payments, order drugs for home delivery, download investigation reports and
receive alerts on essential services. It’s within the strategy of implementing an AI-enabled content management engine to support the appliance, which is able to have the ability to process large amounts of patient
data to offer it with insight into patient needs. The corporate also plan to extend the dimensions of its
reach to patients through its digital ecosystem.

Disclaimer –

The content on this page is made available on the idea of the DRHP (draft red herring prospectus ) filed by Rainbow Children’s Medicare Limited. The
final content could change based on the Red Herring Prospectus (RHP) filed

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