The initial public offering (IPO) of Vijaya Diagnostic Centre has been subscribed 47 percent on September 2, the second day of the bidding process. Investors have put in bids for 1.18 crore equity shares against the IPO size of 2.50 crore equity shares, as per the subscription data available on the exchanges.
The portion set aside for retail investors was subscribed 74 percent, while that of Qualified institutional buyers (QIBs) saw 32 percent subscription. The non-institutional investors' (NIIs) portion was subscribed 5 percent and that Employees 52 percent.
The IPO, which closes on September 3, is a complete offer for sale (OFS) of 3,56,88,064 shares by promoter Dr S Surendranath Reddy, and investors Kedaara Capital AIF and Karakoram Capital AIF 1.
The price band for the issue has been fixed at Rs 522-531 per equity share. At the upper price band, the issue is estimated to garner Rs 1,895 crore.
The company will not directly receive any proceeds from the offer and all the offer proceeds will be received by the selling shareholders.
Vijaya Diagnostic Centre is the largest integrated diagnostic chain in southern India, by operating revenue, and also one of the fastest-growing diagnostic chains by revenue for FY20.
The company offers a one-stop solution for pathology and radiology testing services to their customers through an extensive operational network, which consists of 81 diagnostic centres and 11 reference laboratories across 13 cities and towns in the states of Telangana and Andhra Pradesh and in the National Capital Region and Kolkata as on June 30, 2021.
Based on FY2021 numbers, IPO is priced at a Price to Earnings of 64.3 times and EV/EBITDA of 30 times at the upper price band of the IPO, which is in line with the listed peer group, analysts said.
The company already has a higher market share in key geographies like Hyderabad and we do not expect the covid related benefit to continue in coming years.
“We believe that at Rs 531, all the near term positives are priced in and leaves limited upside for the investors. Hence, we are assigning a “neutral” recommendation to the Vijaya Diagnostic centre limited IPO,” said Yash Gupta, Equity Research Analyst, Angel Broking.
First Published: IST