Rainbow Children's Medicare IPO: How good is it?

In our previous part of Rainbow Children's Medicare IPO story, we read about the key details of the IPO along with important information about the specialty hospital chain. Here we will answer some questions about Rainbow Children's Medicare and evaluate it on parameters like management, financials, valuations, etc. IPO questions The company/business 1) Are the company's earnings before tax more than Rs 50 crore in the last 12 months? Yes. The company's profit before tax was Rs 127 crore in the 12 months ended December 2021 period. 2) Will Rainbow Children's Medicare be able to scale up its business? Yes. The company has opened four hospitals in the last three years and is planning to open more so that it can establish a proper hub and spoke model in all the places it operates in. 3) Does the company have recognisable brands truly valued by its customers? Yes. Rainbow Children's Medicare is known as one of the best paediatric hospitals in India. 4) Does Rainbow Children's Medicare have high repeat customer usage? Not applicable. The concept of returning customers should not be applied to healthcare. 5) Does the company have a credible moat? No. Although Rainbow Children's Medicare is a specialist in paediatrics and obstetrics, there are other established players in the industry who provide similar services. Their specialty or brand recognition does not give a solid moat. 6) Is the company sufficiently robust to major regulatory or geopolitical risks? Yes. The hospital chain has adhered to all the regulations consistently over the years. 7) Is the business of the company immune to easy replication by new players? Yes.