CASE STUDY
Rainbow Children's Medicare
CATEGORY
Supply
Capital market tool
Exit Mobilisation
Geography
India
LISTING EXCHANGE
Bombay Stock Exchange; National Stock Exchange of India
SECTOR
Healthcare
DFI / DONOR INTERVENTION
BII (USD 33.6 million)
TRANSACTION SIZE
INR 1,581 crore (approx. USD 205 million)
TRANSACTION YEAR
2022
Structure and Capital Market Tool
In April 2022, Rainbow Hospitals completed its IPO on the Bombay Stock Exchange and the National Stock Exchange of India. The transaction allowed BII to partially exit its holding in the paediatric hospital chain. In December 2022, BII fully exited its position, selling its remaining shares.
Rainbow Hospitals priced its IPO at INR 516–542 per share to raise up to INR 1,581 crore (approximately USD 205 million; one crore is ten million). The three-day IPO was oversubscribed 12.43 times on the last day of bidding, driven by qualified institutional buyers. The IPO proceeds were earmarked for capital expenditure on new hospitals and equipment.
Background and Market Context
Rainbow Children's Medicare (Rainbow Hospitals) is a leading paediatric and obstetrics hospital chain in India. It expanded from a single 50-bed hospital in 1999 to a chain with 20 hospitals and four clinics across six cities in India as of May 2025. India's infant and maternal mortality rates are high, particularly for extremely pre-term babies. This is mostly due to a severe shortage of specialised neonatal and paediatric surgeons, with only a handful of hospitals staffed and equipped to treat complicated pregnancies and babies with extremely low birth weight.
Rainbow Hospitals treats babies and sick children by operating one of the country's biggest patient transport systems, bringing babies from rural areas up to 300 km away to its flagship centres. The chain also strengthens the wider health system by supplying a meaningful share of India's newly qualified paediatric and neonatal specialists each year, while providing jobs for more than 2,300 people, nearly half of whom are women.
In 2013, Rainbow Hospitals received its first equity investment of USD 17.5 million from British International Investment (BII), the UK's DFI, then known as CDC, to support its expansion and development. BII made subsequent investments in 2016, totalling USD 33.6 million. Over the subsequent years, Rainbow Hospitals grew into a pan-Indian multi-city operation, treating one million mothers and children per year.
Development Impact
Through its divestment from Rainbow Hospitals, BII demonstrated exit mobilisation and provided a case study for supply-side interventions. The offer was absorbed by mainstream global and domestic institutional investors, including the Government of Singapore, Neuberger Berman, and leading Indian mutual funds and insurers, broadening and widening the local investor base in Indian capital markets while allowing BII to recycle its capital.