Cloudnine Filed Draft Papers with SEBI

Cloud Nine
February 11, 2022

Cloudnine, a super-specialty mother and babycare chain of hospitals has filed its draft IPO papers with capital markets regulator SEBI today. The company is looking to raise around Rs 1,200 crore from the public issue of equity shares. It may also consider fundraising of Rs 60 crore via pre-IPO placement, before filing the red herring prospectus with the ROC. If the said pre-IPO placement is completed, then accordingly the fresh issue size will get reduced up to the extent of funds raised. The IPO of Cloudnine will be a mix of a fresh issue of equity shares and an offer for sale (OFS) by existing shareholders of the company. It is backed by marquee investors, including True North Fund V LLP, Sequoia Capital Investment, among others. The company will issue fresh equity shares of face value Rs 5 each for a total of Rs 300 crore. The offer for sale of the company will see shareholders sell a total of 1.32 crore equity shares. R Kishore Kumar, Scrips ‘N’ Scrolls India Pvt Ltd, True North Fund V LLP, Indium V (Mauritius) Holdings Ltd, and Sequoia Capital Investment are among the key shareholders selling shares in the IPO. Cloudnine will utilise fresh issue proceeds for repaying debts (Rs 95 crore), setting up new centres at various locations (Rs 117.9 crore), and acquisition of further shareholding in the subsidiary, Acquity Labs (Rs 12.71 crore), besides general corporate purposes. JM Financial, Axis Capital and ICICI Securities are the book running lead managers to the issue.

Kids Clinic India (Cloudnine) claimed to be the leading brand in the super-speciality mother and baby-care space, based on the highest revenue and highest number of hospitals across the major cities as of FY21.  The private maternity healthcare market in FY20 was Rs 20,800 crore and is projected to grow to Rs 26,100 crore in FY26. The company provides expectant mothers with quality medical expertise, medically advanced facility infrastructure and a bespoke motherhood journey covering most of their needs. The company has been making losses as per the available financials. It posted a loss of Rs 34.71 crore in the year ended March 2021, widening from a loss of Rs 29.62 crore reported in the previous year. However, revenue from operations jumped to Rs 554.58 crore during the year FY21, up from Rs 516.3 crore in FY20. In the six-month period ended September 2021, it clocked a loss of Rs 9.86 crore on revenue of Rs 371.65 crore against a loss of Rs 18.3 crore on revenue of Rs 260.26 crore in the corresponding period last fiscal.

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