Rainbow Children's Medicare IPO: What GMP reflects about the public issue
Premium- Rainbow Children's Medicare IPO GMP today is ₹20, which is ₹5 higher from its Wednesday's grey market premium of ₹15, say market observers
Rainbow Children's Medicare IPO (Initial Public Offering) hit Indian primary markets on 27th April 2022 and it will remain open for bidders till 28th April 2022. So, bidders have two more days left to apply for the public issue worth ₹1595 crore. As per Rainbow Children's Medicare IPO subscription status, the public offer has been subscribed 0.29 times whereas its retail portion has been subscribed 0.48 times. Grey market is also giving positive signals in regard to Rainbow Children's Medicare IPO. According to market observers, shares of Rainbow Children's Medicare are available at a premium of ₹20 in grey market today.
Rainbow Children's Medicare IPO GMP
Market observers said that Rainbow Children's Medicare IPO GMP (grey market premium) today is ₹20, which is ₹5 higher from its Wednesday's grey market premium of ₹15. So, after the opening of Rainbow Children's Medicare IPO subscription, Rainbow Children's Medicare IPO has surged more than 33 per cent and this has happened despite weak stock market sentiments. Market observers said that grey market sentiments may further improve as there are two more days left for bidding. They said that the rise in Rainbow Children's Medicare IPO GMP is marginal but it has importance as Rainbow Children's Medicare IPO subscription status after day one of bidding is not so attractive.
What this GMP mean
As Rainbow Children's Medicare IPO GMP today is ₹20, it means grey market is expecting Rainbow Children's Medicare IPO listing at around ₹562 ( ₹542 + ₹20), which is at par with the Rainbow Children's Medicare IPO price band of ₹516 to ₹542 per equity share.
However, stock market experts said that one should make investment decision on the basis of an IPO's grey market performance. They said that GMP of an IPO is an unofficial data, which has nothing to do with the fundamentals of the company. They advised bidders to look at the balance sheet of the company and then decided whether they want to investment or not.
Rainbow Children's Medicare IPO: Apply or not?
Giving Rainbow Children's Medicare IPO review, 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. This issue is a combo of OFS & fresh issue and is priced at a PE of 43.53 on the is of annualized FY 22 numbers. 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. However, 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."
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