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market | IST

Vijaya Diagnostic Centre IPO: Key things to know before investing

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Vijaya Diagnostic Centre IPO comprises an 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 initial public offering (IPO) of Hyderabad-based Vijaya Diagnostic Centre will open for subscription on September 1. The IPO is a complete offer for sale (OFS) by the selling shareholders.
Vijaya Diagnostic Centre is the largest integrated diagnostic chain in southern India by operating revenue and offers a one-stop solution for pathology and radiology testing services.
Here are key details of the issue:
Issue Date
: The IPO will open for public subscription on September 1 and close on September 3. The anchor book, if any, is likely to open for a day on August 31.
Price Band: The company has fixed the price band for the issue at Rs 522-531 per equity share.
OFS: The IPO comprises an 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.
IPO Size: At the upper price band, the issue is estimated to garner Rs 1,895 crore.
Lot Size: The market lot size is 28 shares. A retail-individual investor can apply for up to 13 lots (364 shares). At the upper end of the price band, one lot will cost investors Rs 14,868.
Offer Ratio: Around 50 percent of the shares in the offer is reserved for Qualified Institutional Buyers (QIBs), 15 percent for Non-Institutional Investors (NIIs) and 35 percent for retail investors. Of the total issue, the company has also reserved 1.5 lakh equity shares for its employees under the IPO. They will get a discount of Rs 52 to bid for shares.
Issue Objective: The company will not directly receive any proceeds from the offer and all the offer proceeds will be received by the selling shareholders.
Lead Managers: ICICI Securities, Edelweiss Financial Services, Kotak Investment Bank are the book running lead managers for the issue.
Allotment & Listing Date: The finalisation of the basis of share allotment is likely to take place on September 8 and the shares are expected to be listed on stock exchanges on September 14.
Selling Shareholders:
Financials
For the three months ended June 30, 2021, and fiscal years 2021, 2020, 2019, the company’s total income was Rs 1,259.70 million, Rs 3,885.93 million, Rs 3,541.82 million and Rs 3,029.44, respectively, and their profit for the period/year was Rs 849.11 million, Rs 625.07 million and Rs 462.72 million, respectively.
About Vijaya Diagnostic Centre
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.
The company offers around 740 routine tests, 870 specialised pathology tests, 220 basic tests, and 320 advanced radiology tests. The company also offers a broad spectrum of customised health and wellness packages to its customers.
Promoters & Management
Dr S Surendranath Reddy is the promoter and Executive Chairman of the company.
Sunil Chandra Kondapall is the Executive Director, S Geeta Reddy is Non-Executive Director and Satyanarayana Murthy Chavali is the Non-Executive Independent Director of the company.
Strengths
Largest and Fastest growing diagnostic chain with a dominant position in South India; well-positioned to leverage the high growth in the Indian diagnostic industry.
Integrated diagnostics provider that offers a one-stop solution at an affordable price with a focus on superior quality standards.
High Brand recall driving high individual consumer business share and customer stickiness.
Strong technical capabilities, quality infrastructure and state of the art medical technology with strong IT infrastructure.
Dedicated management team with significant industry experience.
Analyst’s Take
Vijaya Diagnostics IPO has been priced at Rs 531 which seems to be the higher side of the recently listed diagnostic company. Companies majority revenue comes from Hyderabad. The IPO has been priced at price to earning of 64 times of FY2021 earning which is near around the listed players in India. We have a neutral outlook on Vijaya Diagnostic centre IPO, said Yash Gupta, Equity Research Analyst, Angel Broking.