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Krsnaa Diagnostics IPO to open today; key things you should know

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Krsnaa Diagnostics IPO, which is opening tomorrow, comprises a fresh issue of shares worth Rs 400 crore and an offer for sale of shares worth Rs 813.3 crore.

Krsnaa Diagnostics IPO to open today; key things you should know
The public issue of Krsnaa Diagnostics Limited, a tech-enabled diagnostics services provider, will open for subscription on Wednesday, August 4. It is one of the four initial public offers (IPOs) set to open tomorrow. Devyani International, Exxaro Tiles, and Windlas Biotech are the other three.
The offering comprises a fresh issue of shares worth Rs 400 crore and an offer for sale of shares worth Rs 813.3 crore.
The issue will close on August 6 and trading will commence on the BSE and NSE on August 17.
Here's everything you need to know:
Opening date:
August 4
Closing date: August 6
Price band: The price band is set at Rs 933-954 per share.
About the firm: Krsnaa Diagnostics is one of the largest differentiated diagnostic service providers in the country. It provides a range of tech-powered services like imaging (including radiology), pathology/clinical laboratory, and teleradiology services to public and private hospitals. It also offers its services to medical colleges and community health centres.
It focuses on the public-private partnership (PPP) segment of the diagnostics and has the largest presence in the segment. As of June 2021, 1,797 of its centres were established under the PPP agreement with public health agencies.
Moreover, it is growing its collaboration with private healthcare providers. It operates 26 such centres.
As of June 2021, its team had 190 radiologists, eight microbiologists, 30 pathologists, over 2,800 qualified professionals including technicians, clinicians, and operators. Since its inception, the diagnostic firm has served over 2 crore customers.
Its promoter Rajendra Mutha holds a 29.53 percent stake in the company and the promoter group holds a stake of 31.62 percent. Investors like Phi Capital, Somerset, and Kitara hold 23.42 percent, 16.38 percent, and 16.38 percent stake, respectively.
Size of the issue: The offer comprises a fresh issue of shares worth Rs 400 crore and an offer for sale of shares worth Rs 813.3 crore.
The OFS consists of a sale of 16 lakh shares by PHI Capital Trust-PHI Capital Growth Fund-I, 33 lakh shares by Kitara PIIN 1104, 35 lakh shares by Somerset Indus Healthcare Fund I, and 21,380 by Lotus Management Solutions (acting through Mayur Sirdesai).
Reservation: Of the total issue, retail investors can invest in 10 percent of the net offer, and non-institutional investors can invest in 15 percent. However, 75 percent of the offering is reserved for qualified institutional buyers.
Shares worth over Rs 20 crores are reserved for employees and they will get a discount of Rs 93 per share to the final issue price.
Objective: The company aims to use the proceeds from listing to finance the cost of establishing diagnostics centres in Punjab, Karnataka, Himachal Pradesh, and Maharashtra. It also plans to repay, in full or part, borrowings from banks and other lenders availed by the company. Lastly, a portion of the proceeds will go towards other general corporate expenses.
Book runners: JM Financial Ltd, DAM Capital Advisors, Equirus Capital Private Ltd, and IIFL Securities are the lead book-running managers of the issue.
Financials: The company has demonstrated consistent growth in terms of adjusted EBITDA and revenue. Its net revenue from operations increased at an annual growth rate of 37.65 percent during FY19-21. It had reported a profit of Rs 184.93 in FY21, versus a loss of Rs 111.95 crore in FY20 and a loss of Rs 58.06 crore in FY19.
The company doesn't have any bad debts and has consistently generated positive cash flows from operating activities.
Key risks: The company has fixed the pricing for its diagnostic services under the agreement. And the business is largely capital intensive.
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