Multi-specialty pediatric hospital chain Rainbow Children’s Medicare Ltd and digital signature certificate provider eMudhra Ltd have received markets regulator Sebi’s go-ahead to raise funds through initial public offerings (IPOs).
The companies, which filed their preliminary IPO papers with Sebi between November and December 2021, obtained its observation letters during March 9-11, an update with the regulator showed on Monday. In Sebi’s parlance, issuance of observation letter implies its go-ahead to float initial share-sales.
Going by the draft papers, the public issue of Rainbow Children’s Medicare comprises fresh issue of equity shares aggregating up to Rs 280 crore and an offer-for-sale (OFS) of up to 2.4 crore equity shares by the selling shareholders. According to market sources, the IPO size is expected to be more than Rs 2,000 crore.
The offer also includes a reservation for subscription by eligible employees. The company proposes to utilise the net proceeds from the fresh issue towards early redemption of non-convertible debentures (NCDs) issued by the company, in full; capital expenditure towards setting up of new hospitals and purchase of medical equipment for such new hospitals; and general corporate purposes.
Rainbow, backed by the UK-based development finance institution CDC Group plc, established its first 50-bed pediatric specialty hospital in 1999 in Hyderabad. As of September 2021, Rainbow operates 14 hospitals and three clinics in six cities in India, with a total bed capacity of 1,500 beds. The IPO of eMudhra consists of fresh issuance of equity shares worth Rs 200 crore and an OFS of 85.1 lakh shares by promoters and existing shareholders, draft papers showed.
eMudhra might consider raising Rs 39 crore through a pre-IPO placement. If such placement is undertaken, the fresh issue size will be reduced. The proceeds from the fresh issue will be utilised to repay debt, support working capital requirements, purchase equipment and pay for other related costs for the data centre proposed to be set up in India and overseas locations, develop products, invest in eMudhra INC and for general corporate purposes.
eMudhra is the largest licensed certifying authority in India, with a market share of 37.9 per cent in the digital signature certificate market space in financial year 2021, having grown from 36.5 per cent in FY 2020. The equity shares of both the companies will be listed on the BSE and the NSE.
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