Krsnaa Diagnostics Limited opened its initial public offering (IPO) on August 4 and is one of the first four companies making their debut in the market in August. The company is looking to clean out with an issue size of Rs 1,213.33 crore this week. The proceeds will be used to bolster the company’s infrastructure and help them expand in the near future. Krsnaa Diagnostics was founded in 2010 and is touted as one of the fastest-growing diagnostics chains in India, thank to its wide array of services and the customer base that it caters to, which is extensive. With the launch of the Krsnaa Diagnostics IPO on Wednesday, here is all you need to know before subscribing to it.
1) The Krsnaa Diagnostics Issue Size
Krsnaa Diagnostics has an issue size of Rs 1,213.33 crore. The massive issue consists of a fresh issue as well as an offer for sale (OFS). The fresh issue was listed as aggregating up to Rs 400 crore with Rs 5 per equity share as the face value. The OFS on the other hand aggregates to Rs 813.33 crore with 8,525,520 equity shares that have a Rs 5 per share face value. The IPO itself opened on August 4 and will close on August 6 after subscriptions. Any anchor bookings that might have taken place happened a day before on August 3.
2) Krsnaa Diagnostics Price Band and Grey Market Premium (GMP)
The IPO has an established price band of Rs 933 to Rs 954 per equity share. The GMP for the issue on opening day was Rs 445 to Rs 450 at roughly 07:20 IST. This indicated that the premiums were trading from Rs 1,378 to Rs 1,399 on the lower end. On the higher end of Rs 450, the premiums were likely trading at Rs 1,383 to Rs 1,404.
3) Krsnaa Diagnostics IPO Lot Size
The IPO carries a minimum lot size of 15 shares that have a minimum application amount of Rs 14,310. The upper limit of the lot stands at 195 shares with an application amount of Rs 186,030. The retail investor category can apply to a maximum of 13 lots, which is 195 shares at the upper limit of the lot size.
4) Reservations for Investors
The investors for this IPO have been divided into three categories – the qualified institutional buyers (QIBs), the non-institutional investors (NIIs) and the retail investor segment. The QIBs have the largest reservation of 75 per cent, which is about 9,538,794 shares aggregating to about Rs 910 crore. The NIIs have a reserved portion of 15 per cent or 1,907,759 shares, which aggregates to Rs 182 crore. The retail investors have a reservation of 10 per cent which is 1,271,839 shares that has an aggregation of Rs 121.33 crore.
5) Krsnaa Diagnostics IPO Objective
Krsnaa Diagnostics is looking to use the proceeds from the issue to fund its expansion by way of new diagnostics centres in Punjab, Karnataka, Himachal Pradesh, and Maharashtra. The other part of the proceeds will go towards repayment and pre-payment purposes for the company’s borrowings. A set portion of the funds will also be used to back other general corporate expenses.
6) Post-IPO Dates
After the IPO closes on August 6, the allotments will happen. The basis of allotment is set for August 11. The initiation of refunds and the accreditation to Demat accounts will likely take place on August 12 and August 13 respectively. The listing on the NSE and BSE will likely take place on August 17, though this is yet to be confirmed.
7) Promoter Group and Key Leads in the IPO
The Promoter for the IPO is the Chairman of Krsnaa Diagnostics, Rajendra Mutha. The lead managers for the public issue are JM Financials, DAM Captial Advisors, Equirus Capital and IIFL Securities. The official Registrar for the IPO is KFin Technologies Private Limited.
8) Company Overview
The services that the company provides include imaging/radiology services (X-rays, MRI, etc.), routine clinical laboratory tests, pathology, and teleradiology services. The main target customers for the services lie in non-metro, lower-tier cities and towns. In these geographies, the customer base that the company targets are private and public hospitals, medical colleges, and community health centres. The company has over 1,801 diagnostics centres across the country that specialise in radiology and pathology. It is also present in 13 different cities in India.
9) Krnsaa Diagnostics Company Financials
The company has marked an upward move in terms of income for the last fiscal ended March 3, 2020, with Rs 271.38 crore. The previous year stood at Rs 214.31 crore according to Angel Broking. However, losses were also seen moving up in the same period as the net loss was up to Rs 111.95 crore, whereas the previous year was Rs 58.05. The net profit did, however, increase for the nine-month period ended December 31, 2020, with Rs 195.93 crore.
10) Should You Subscribe?
Ajit Mishra the VP of Research from Religare Broking said that the company is well-placed to benefit from the rapidly growing industry which is estimated to be approximately 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 trend. This combined with the growth of the industry gives analysts a positive outlook for the company going forward.
“The financial performance has been healthy for the company. With promising industry growth prospects coupled with the company’s strong execution track record, we have a positive on the company for long term,” said Mishra.
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