Krishna Diagnostics has finalized the date for its initial public offering and is going to make its market debut on Wednesday. The IPO, which opens on August 4, will close its subscriptions on August 6. Any and all anchor bookings will take place one day in advance of August 3. IPO Opens for subscription. The price band for the issue was listed as Rs 933 to Rs 954 per equity share with a face value of Rs 5 per share. This is a book-built issue IPO. The issue has a gray market premium of Rs 400, which indicates that the shares are trading at a premium of Rs 1,333 to Rs 1,354 per share in the unlisted market.
NS Krishna Diagnostics IPO There is a lot size of 15 shares as a minimum with an application amount of Rs 14,310. At the top end of the lot, the size is 195 shares with an application amount of Rs 186,030. Retail investors can apply for the issue up to 13 lots at the upper end of the lot size. However, in terms of investor allocation, the retail share is only 10 per cent. Qualified institutional buyers (QIBs) hold 75 per cent and non-institutional investors (NIIs) have 15 per cent reservation for IPOs.
Krishna Diagnostics is looking to raise a total of Rs 1,213.33 crore through its public issue. The issue consists of a fresh issue of Rs 400 crore as well as an Offer for Sale (OFS) of Rs 813.33 crore with 8,525,520 equity shares with a face value of Rs 5 per share.
Speaking on the company and its growth, Ajit Mishra, VP Research, Religare Broking said, “The size of the clinical industry is around Rs. 710 billion in FY21, echoing the growth from healthcare delivery services, registering a healthy CAGR of 14 per cent from 13 per cent in FY17-FY21. The industry is expected to grow at the rate of around 15 per cent and achieve a value of Rs. 920 billion FY23. This will be due to the increasing demand for inpatient treatment and outpatient treatment. Furthermore, as literacy rates and disposable incomes rise, individuals increasingly demand better healthcare facilities and quality of care, leading to higher amounts of inpatient and outpatient treatments. The growth in demand for health care has also received a lift from urbanization and an increase in lifestyle-related diseases, such as heart disease, diabetes and cancer, forcing many healthcare providers to expand their offerings in metropolitan areas and Tier-I and II cities. motivated to increase. “
The company plans to use the net proceeds from the IPO to finance the cost of setting up diagnostic centers in Punjab, Karnataka, Himachal Pradesh and Maharashtra. The remaining amount will go towards repayment and pre-payment of the firm’s borrowings in full or in part. A portion of the proceeds will also be used for general corporate purposes.
The company was incorporated in 2010 and has been termed as one of the fastest growing diagnostics chains in India. It has a diverse range of diagnostic services that it provides, including imaging/radiology services (X-rays, MRIs, etc.), routine diagnostic laboratory tests, pathology and teleradiology services. The company’s main customers are private and public hospitals, medical colleges and community health centres. Krishna Diagnostics has key strengths that make it an attractive IPO to subscribe to. For example, it is one of the largest differentiated diagnosis providers in India, which also has a wide range of services for the same. It also has a strong brand image built on affordable pricing and quality healthcare services. The company has a strong national level market footprint as it is present in around 13 cities across the country.
Should you subscribe to Krishna Diagnostics IPO?
Financially speaking, the company has managed to maintain a strong performance. The company’s total income for the financial year ended March 31, 2020 was Rs 271.38 crore. This is higher than last year’s Rs 214.31 crore. In FY20, the company’s net loss increased to Rs 111.95 crore from Rs 58.05 in the previous year. However, Krishna Diagnostics saw a sharp decline in expenditure and higher revenue. The net profit and revenue recorded for the nine-month period ended December 31, 2020 were Rs 195.93 crore and Rs 562.7 crore, respectively. This trend was a result of higher revenue from operations due to the onset of the pandemic.
“Krishna is well positioned to benefit from the growing industry trends on the back of its scale, strong brand equity and wide footprint across India. In addition, its PPP agreements to deploy diagnostic centers for its radiology and pathology services are usually long-term contracts that ensure visibility of revenue for its operations. Going forward, the company plans to expand its network of diagnostics centers and expand its offering of diagnostic services. It also plans to increase its digital footprint and focus on improving its profitability and efficiency. The financial performance of the company has been good. With the company’s strong execution track record coupled with promising industry growth prospects, we are positive on the company for the long run,” said Mishra.
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