Rays of Belief

Rays of Belief

By Geetanjali Kedia
about 11 days ago

IPO Size: Rs. 125 cr, entirely Fresh Issue

  • Rs. 41 cr for adding 319 new centres
  • Rs. 24 cr for lease payments of existing centres
  • Rs. 10 cr for brand awareness and outreach

Price band: Rs. 227-239 per share

M cap: Rs. 498 cr (IPO is 25% of m cap)

  • 75% for institutions and only 10% retail as operating profits are lower than Rs. 15 cr and FY23 reported net loss

IPO Date: Tue 1st Sep to Thu 3rd Sep 2026, Listing Tue 8th Sep 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

For-Profit Social Enterprise

Rays of Belief, established in 2018, operates 139 centers branded ‘Mom’s Belief’ wherein 339 clinical professionals provide intervention plans for children with Neurodevelopmental Disorders (NDDs) including Autism Spectrum Disorder Attention-Deficit/ Hyperactivity Disorder (ADHD), Down Syndrome, Cerebral Palsy, Intellectual Disability, Learning Disabilities and Global Developmental Delays (GDD).

 

Acquisition of FY25

On 23.6.25, company acquired Mom's Belief US Inc and Allergy and Immunology Virginia LLC, adding 3 centres in USA.

On FY26 revenue of Rs. 82 cr, PAT was Rs. 5 cr, net margin of 6%. 41% of this Rs. 82 cr revenue came from 3 overseas centres in US and another 25% from exports of services to holding company to Singapore and US. Yet company plans to more than triple centre count in India, by adding 319 new centres.

 

Execution Risk

Number of children and families enrolled declined to 9,205 in FY26 from 9,344 in FY24. In the past 3 fiscals, company has added an average of 40 centres per year, and now plans an aggressive expansion of average 100 centres per annum. This poses a lot of execution risk.

 

Expensive Pricing

M cap of Rs. 498 cr implies a historic PE multiple of 75, on FY26 PAT of Rs. 5 cr, on pre-money basis. Even if 30% growth is assumed for FY27E, the current year PE multiple of 58x.

Zerodha’s Rainmatter Investments had invested Rs. 2 cr in Apr 2025, at bonus-adjusted price of Rs. 117 per share, value for which, at the IPO price, has doubled.

While the social angle of the IPO may appeal to some, on fundamentals, the IPO is expensively priced.