Display issues with recent upgrade to ios 16.6.1 of iphone 13 - Rainbow display

The upgrade to 16.6.1 was ten days back. Initially observed a momentary flickering of the display for couple of times in last 5-6 days. Last night out of the blue, the screen turned rainbow with multi-colored horizontal lines. There were no physical impacts for the phone or accidental drops since it was brought in April 2023.

Anyone is facing similar issues?

Is it a software upgrade issue?

Or is it a hardware issue where the display has gone bad?