Shares of Rainbow Children's Medicare Ltd. declined on debut even as its initial public offering was subscribed over 12 times.
The stock of the Hyderabad-based hospital chain listed at Rs 506 apiece on the BSE, a discount of 6.6% to its IPO price of Rs 542. It then fell as much as 22% to an intraday low of Rs 421, before closing 17% lower.
The IPO saw the highest demand from institutional investors—the portion set aside for the category was subscribed over 38 times. The portion reserved for employees, however, remained undersubscribed.
With the proceeds, the company plans a capex of Rs 244 crore over the next three years to set up six new hospitals. It also plans to use Rs 40 crore to redeem non-convertible debentures issued to investor CDC Group.
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