Updated: September 2, 2021 9:39:34 am
Vijaya Diagnostic IPO: The initial public offering (IPO) of pathology and radiology services chain Vijaya Diagnostic Centre opened for subscription on Wednesday, September 1, 2021, at a price band of Rs 522-531 per share. The offer will be available till Friday, September 3, 2021.
Vijaya Diagnostic Centre IPO aims to raise Rs 1,895 crore however, the offer is entirely an offer for sale (OFS) of 35,688,064 equity shares by the promoter Dr S Surendranath Reddy and investors — Karakoram Ltd and Kedaara Capital Alternative Investment Fund-Kedaara Capital AIF I. As per the OFS, Reddy will sell 50.98 lakh equity shares, Karakoram will offload 2.95 crore equity shares and Kedaara Capital will divest 11.02 lakh shares.
Vijaya Diagnostic Centre provides pathology and radiology testing services to customers through an extensive network, which comprises of 80 diagnostic centres and 11 reference laboratories across 13 cities and towns in the states of Telangana and Andhra Pradesh, National Capital Region and Kolkata.
The company will not receive any proceeds from the IPO since it only involves the OFS.
Half of the issue has been reserved for qualified institutional investors, 35 per cent is reserved for retail investors and the rest 15 per cent are for non-institutional investors.
Investors who wish to subscribe to the Vijaya Diagnostic IPO can bid in a lot of 28 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,868 to get a single lot of Vijaya Diagnostic Centre. The shares will be listed on both BSE as well as the National Stock Exchange (NSE).
The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, September 6, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.
ICICI Securities, Edelweiss Financial Services and Kotak Mahindra Capital Company are the book running lead managers to the IPO while KFin Technologies is the registrar of the issue.
Before heading into the IPO, Vijaya Diagnostic Centre raised over Rs 566 crore (Rs 5,66,12,12,958) from 41 anchor investors in lieu of 1,06,61,418 equity shares at Rs 531 each, data from the stock exchanges showed.
The anchor investors include the likes of Fidelity Management Research, Fidelity Investments, Aberdeen, Abu Dhabi Investment Authority, Kuwait Investment Authority and Government Pension Fund Global among others.
The research team at IIFL Securities in their IPO note has recommended a “Subscribe” to the offer.
IIFL Research in its IPO report said, “At the upper price band, Vijaya Diagnostic Centre Limited is demanding a PE multiple of ~64.3X of FY21 earnings which is lower than the industry average of 90.8X. Considering the future growth potential of healthcare industry, revenue from operation, EBITDA and PAT growth of 13.5 per cent, 23.9 per cent and 35.5 per cent CAGR during FY19 to FY21, respectively, strong ROE and ROCE of 23.64 per cent and 42 per cent, respectively in FY21, debt-free company with plans for acquisition and expansions, diversified service offerings and strong technical capabilities of the company, we recommend ‘Subscribe’ to the issue with a long-term perspective.”
The share allotment is likely to take place on September 8, 2021, and the shares are expected to be listed on September 14, 2021, according to the timeline given in the red herring prospectus (RHP).
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