Krishna Diagnostics Limited It opened its initial public offering (IPO) on August 4 and is one of the first four companies to make its market debut in August. The company is looking to clean up this week with an issue size of Rs 1,213.33 crore. The proceeds will be used to strengthen the company’s infrastructure and help them expand in the near future. Krishna Diagnostics was established in 2010 and is known as one of the fastest growing diagnostics chains in India, thanks to its wide range of services and customer base which is extensive. with the launch of Krishna Diagnostics IPO On Wednesdays, here’s everything you need to know before subscribing to it.
1) Krishna Diagnostics Issue Size
The issue size of Krishna Diagnostics is Rs 1,213.33 crore. The major issue consists of a new issue as well as an offer for sale (OFS). The fresh issue was listed with a face value of Rs 5 per equity share up to Rs 400 crore. On the other hand the OFS is totaling Rs 813.33 crore with 8,525,520 equity shares having a face value of Rs 5 per share. NS IPO Open only on 4th August and will close on 6th August after subscription. Any anchor booking that can happen must have happened a day before on August 3.
2) Krishna Diagnostics Price Band and Gray Market Premium (GMP)
The established price band of the IPO is Rs 933 to Rs 954 per equity share. The issue’s GMP on Opening Day was Rs 445 to Rs 450 at 07:20 IST. This indicated that the premium was trading at Rs 1,378 to Rs 1,399 at the lower end. At higher levels of Rs 450, premiums were trading potentially higher at Rs 1,383 to Rs 1,404.
3) Krishna Diagnostics IPO Lot Size
The IPO has a minimum lot size of 15 shares, with a minimum application amount of Rs 14,310. The upper limit of the lot is 195 shares with an application amount of Rs 186,030. The retail investor category can apply for a maximum of 13 lots, which is 195 shares on the upper limit of the lot size.
4) Reservation for Investors
The investors for this IPO are divided into three categories – Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs) and Retail Investors segment. QIBs have the largest reservation of 75 per cent, which is around 9,538,794 shares which together amount to around Rs 910 crore. The NII holds a reserve of 15 per cent or 1,907,759 shares, totaling Rs 182 crore. Retail investors have 10 per cent reservation which is 1,271,839 shares totaling Rs 121.33 crore.
5) Krishna Diagnostics IPO Objectives
Krishna Diagnostics is looking to use the proceeds from this issue to finance its expansion through new diagnostics centers in Punjab, Karnataka, Himachal Pradesh and Maharashtra. The other portion of the proceeds will go towards repayment and prepayment purposes for the company’s borrowings. A specified portion of the funds will also be used to meet other general corporate expenses.
6) Post-IPO Dates
The allotment will take place after the IPO closes on August 6. The basis of allotment has been fixed on August 11. The commencement of refund and recognition of demat accounts will take place on August 12 and August 13 respectively. The listing on NSE and BSE is likely to happen on August 17, though the same is yet to be confirmed.
7) Promoter Group and Key Leads in IPO
The promoter of the IPO is Krishna Diagnostics chairman Rajendra Mutha. The principal managers of the public issue are JM Financial, DAM Capital Advisors, Equirus Capital and IIFL Securities. The official registrar for the IPO is KFin Technologies Private Limited.
8) Company Overview
Services provided by the company include imaging/radiology services (X-ray, MRI, etc.), routine diagnostic laboratory tests, pathology and teleradiology services. The main target customers for the services are in non-metro, low-lying cities and towns. In these geographies, the customer base targeted by the company is private and public hospitals, medical colleges and community health centers. The company has over 1,801 diagnostic centers across the country that specialize in Radiology and Pathology. It is also present in 13 different cities of India.
9) Krishna Diagnostics Company Financials
The company has made an upward move in terms of earnings with Rs 271.38 crore in the previous financial year ended March 3, 2020. According to Angel Broking, the previous year was Rs 214.31 crore. However, the losses were also seen widening in the same period as the net loss stood at Rs 111.95 crore as against Rs 58.05 in the previous year. However, the net profit for the nine-month period ended December 31, 2020 increased by Rs 195.93 crore.
10) Should you subscribe?
Ajit Mishra, Research VP, Religare Broking said that the company is well poised to benefit from the fast growing industry which is estimated to be around Rs. 710 billion in FY21, registering a healthy CAGR of 13% to 14% over FY17-FY21. In a note, Mishra mentioned that the company has maintained a strong financial track record and a strong execution propensity. This combined with the growth of the industry gives analysts a positive outlook for the company going forward.
“The financial performance for the company has been healthy. With the company’s strong execution track record coupled with promising industry growth prospects, we are positive on the company for the long term,” said Mishra.
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