Rainbow Children's Medicare IPO a good bet for long term? What analysts say
Premium- Rainbow Children's Medicare Ltd. (RCML) is a leading multi-specialty pediatric and obstetrics and gynecology hospital chain in India, say stock market experts
Rainbow Children's Medicare IPO (Initial Public Offering) is opening for subscription on 27th April 2022 i.e. tomorrow. While market investors are busy scanning financial balance sheet of the company, some of the stock market analysts have started giving their view on the public issue as well. Following 'buy, hold and forget' rule, some stock analysts have recommended this stock have shown faith in the sustained business model of the multi-specialty hospital chain company.
Speaking on the fundamentals of Rainbow Children's Medicare IPO, Santosh Meena, Head of Research at Swastika Investmart Ltd said, "Rainbow Children's Medicare Ltd. (RCML) is a leading multi-specialty pediatric and obstetrics and gynecology hospital chain in India. They have followed a financially disciplined model, focusing on cost-effective growth. Going forward, they may seek to expand their hospital network through the acquisition of Brownfield assets or the development of Greenfield assets."
Santosh Meena of Swastika Investmart went on to add that Rainbow Children's Medicare IPO is a combo of OFS & fresh issue and is priced at a PE of 43.53 on the is of annualized FY 22 numbers adding, "The profitability for 9 months ended 31st December 2021 increased substantially to 126.41 crores from 38.53 crores in the same period of last fiscal. There might be a possibility that this sudden spurt in profitability was due to covid second wave hospitalizations in Q1 FY21-22. Thus we believe that this exponential rise in profit might not continue in the future."
Speaking on Rainbow Children's Medicare IPO, Abhay Doshi, Founder at UnlistedArena.com said, "Rainbow Children Medicare Limited is leading multi-specialty hospital chain in India operating in six cities with total bed capacity of 1500 beds following hub-and-spoke model mainly. On the operational front, the company has posted steady top and bottom line numbers, However, 9MFY22 performance seems to be exceptional."
Abhay Doshi went on to add that at the upper price band, pre-fresh issue, the asking PE of the public issue comes around 128x and market cap to revenue comes around 8x based on FY21 financials.
"The asking valuations is in-line with listed players. However, It would be keen to watch if the company can maintain 9MFY21 performance going ahead," Abhay Doshi of UnlistedArena.com concluded.
On whether Rainbow Children's Medicare IPO is good or bad for IPO investors, Santosh Meena of Swastika Investmart said, "The specialized nature of the business, experienced management team, proven ability to attract, train and retain high-caliber medical professionals, under penetration of hospitals in India, make this issue good for long-term investors."
Rainbow Children's Medicare IPO GMP
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For those who follow grey market, Rainbow Children's Medicare IPO GMP has remained steady today. According to market observers, Rainbow Children's Medicare IPO GMP today is ₹50, which is unchanged from its grey market premium on Monday.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.