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Rainbow Children’s Medicare’s weak listing disappointed, what should investors do now?

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Rainbow Children’s Medicare: India’s multi-specialty pediatric, obstetrics and gynecology hospital chain Rainbow Children’s Medicare has seen a weak opening in the stock market on May 10. This share was listed on the National Stock Exchange (NSE) at a price of Rs 510 per share with a discount of 6 percent as compared to the issue price of Rs 542.

Also, it was listed on BSE at Rs 506. At around 1 pm, the stock went down by 19 percent to Rs 438. Although today there is definitely some increase in it and till the writing of the news, it was seen trading at Rs 466.40 per share with an increase of 3.60 percent.

Prior to the listing, Specialists were positive about the IPO and gave a ‘subscribe’ rating to the issue. However, due to the ongoing volatility and negative sentiments due to the geopolitical crisis and the hike in interest rates, the issue was hit hard and it did not live up to the market expectations.

What to do in shares now?

Experts believe that the company’s weak listing could be due to volatility, negative sentiment and low investor interest in the hospital business. They also say that the company has a specialized business, an experienced management team, trained medical professionals, but the hospital is a competitive business.

this is also an argument

It is suitable for investors with a long-term outlook as profitability returns to normalcy post-Covid. Some people also say that the target market of the company is expected to grow at a CAGR of 14 per cent till FY26. However, it will be important for Rainbow to sustain the current growth amid increasing consolidation in the healthcare sector.

PE is better than these companies

Some research analysts are also speculating that investors should hold the stock for a long time. The company’s valuation (43 times that of PE) is much lower than its rivals Apollo Hospitals and Fortis healthcare. The shares of these companies are trading at 63 and 53 times PE respectively.

Apart from this, the issue has not lived up to the expectations of the market due to the ongoing volatility and negative sentiments due to the geopolitical crisis and the rise in interest rates. However, it can be bet for long term due to strong fundamentals and attractive business model.

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