Rainbow Children’s Medicare IPO - Subscription Day 3

5paisa Research Team 5paisa Research Team 29th April 2022 - 07:01 pm

The Rs.1,580.85 crore IPO of Rainbow Children’s Medicare Ltd Solutions, consisting of a fresh offer of Rs.280 crore and an offer for sale (OFS) of shares worth Rs.1,300.85 crore, saw tepid response overall on Day-1 and Day-2 of the IPO.

As per the combined bid details put out by the BSE at the end of Day-3, Rainbow Children’s Medicare IPO was subscribed 12.43X, with the QIB segment leading the way in terms of subscription followed by the HNI/NII segment and the retail segment. The initial public offer (IPO) has closed for subscription on Friday, 29th April 2022.

As of close of 29th April 2022, out of the 205.15 lakh shares on offer in the IPO (net of anchor allocation), Rainbow Children’s Medicare Ltd saw bids for 2,549.04 lakh shares. This implies an overall subscription of 12.43X of the issue size. The granular break-up of subscriptions was extremely strong for QIB investors followed by HNI/NII investors and retail investors in that order.

Normally, it is only on the last day of bidding, the NII/HNI bids and the QIB bids build up substantial momentum and that is what we got to see in the IPO of Rainbow Children’s Medicare.

Rainbow Children’s Medicare IPO Subscription Day 3

Category	Subscription Status
Qualified Institutional Buyers (QIB)	38.90 Times
Non Institutional Investors (NII)	3.73 Times
Retail Individuals	1.38 Times
Employees	0.31 Times
Overall	12.43 times

QIB Portion

On 26th April, Rainbow Children’s Medicare Ltd completed an anchor placement of shares to anchor investors. A total of 86,63,404 shares of Rainbow Children’s Medicare Ltd Solutions were allocated to 36 anchor investors at the upper price band of Rs.542 per share.

Here are the top 6 anchor investors in the IPO of Rainbow Children’s Medicare

Anchor Investor	No. of Shares	% of Anchor Portion	Value Allocated
SBI Healthcare Opportunities Fund	745,478	8.61%	Rs.40.41 crore
Amansa Holdings Private Limited	745,478	8.61%	Rs.40.41 crore
Neuberger Berman EM Equity	684,342	7.90%	Rs.37.09 crore
Government of Singapore	653,076	7.54%	Rs.35.40 crore
Ashoka India Opportunities Fund	592,056	6.83%	Rs.32.09 crore
Nippon India Pharma Fund	447,228	5.16%	Rs.24.24 crore

The total anchor allocation of Rs.469.56 crore was spread across 36 investors. The total anchor allocation of 86.63 lakh shares was done at the upper price band of Rs.542. The total anchor allocation amounted to 29.70% of the total issue size. Out of the total anchor portion, 44.99% was made to 18 mutual fund schemes spread across 9 AMCs.

The QIB portion (net of anchor allocation as explained above) has a residual quota of 57.76 lakh shares of which it has got bids for 2,246.98 lakh shares at the close of Day-3, implying 38.90X subscription for QIBs at the close of Day-3. QIB bids typically get bunched on the last day, and that is what we got to see in the case of Rainbow wherein the QIB subscription jumped from tepid to robust.

The anchor demand was reasonably robust across different classes of institutions, so the indications were already that the QIB interest should pick up on the last day, which is what actually happened. It must also be remembered that the QIB allocation is 50% in the IPO while it is 15% for HNI / NIIs and 35% for retail.

HNI / NII Portion

The HNI portion got subscribed 3.73X (getting applications for 161.63 lakh shares against the quota of 43.32 lakh shares). This is a relatively moderate response at the close of Day-3 with most of the response coming from HNI individuals and is an indication that funding was not too active in the IPO.

This segment normally sees the maximum response bunched on the last day. The accretion in HNI/NII application bids on the last day of the IPO was actually quite moderate, which is not the case in most IPOs.

Retail Individuals

The retail portion was subscribed a relatively subdued 1.38X at the close of Day-3 and that segment, as usual, did not see any great traction on the last day. Retail interest is normally seen in the first 2 days, so the eventual interest level did not change substantially on the last day of subscription.

For retail investors; out of the 101.07 lakh shares on offer, valid bids were received for 139.51 lakh shares, which included bids for 111.64 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.516-Rs.542) and the issue has closed for subscription on 29th April 2022.

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