Vijaya Diagnostics Centre Limited is eyeing an initial public offering (IPO) of Rs 1,895.04 crore, which it plans to open in September. The diagnostics chain is looking to go public with this issue come September 1. The company, which is one of the fastest-growing diagnostics chains in South India, has a multitude of services with regards to pathology and radiology testing services. The company also acts as a one-stop solution diagnostics service provider.
After the issue opens on September 1, it is set to last for three trading days after which, it will close on September 3. The grey market premium for the issue stood at Rs 20 on August 30. This indicated that shares were coming in at a premium of Rs 542 to Rs 551 on the unlisted market.
This book-built issue is entirely made up of an offer for sale (OFS) which aggregates up to Rs 1,895.04 crore with 35,688,064 equity shares. The Vijaya Diagnostics IPO also has a price band of Rs 522 to Rs 531 per equity share with a Rs 1 per equity share as the face value. Other than trying to sell off its shares in the OFS, the other main objective of the IPO is for the company to use the net proceeds to achieve the benefits of share listing on the Stock Exchanges.
The issue has a lot size of 28 shares at the lower end with an application cut-off amount of Rs 14,868. On the higher end, the lot size of the public issue stands at 364 shares with an application amount of Rs 193,284. For the Vijaya Diagnostics IPO, the retail-individual investors (RIIs) can apply for a total of 13 lots at the upper end of the lot size. In terms of subscriptions, the Retail portion has an allotment of 35 per cent for the IPO. The qualified institutional buyers (QIBs) were given a 50 per cent reservation for the issue. Meanwhile, the non-institutional investors (NIIs) have a 15 per cent reservation allotted to them.
The promoter for the Vijaya Diagnostics Centre Limited IPO is Dr S Surendranath Reddy, who is the Executive Chairman of the company. The post IPO dates cannot be cited will full certainty as of yet, but reports indicate that the issue will have a basis of allotment on September 8. Following which the refunds will take place on September 9 and the accreditation of shares on September 13.
Should You Invest in the Vijaya Diagnostics IPO?
Speaking on the Vijaya Diagnostics IPO, Yash Gupta, the Equity Research Analyst for Angel Broking Ltd said, “South India based diagnostic chain Vijaya Diagnostic, open for subscription from 1st September to 3rd September 2021. Investors can apply in this IPO with a lot size of 28 shares. The company has fixed the price band of Rs. 522-531 which seems to be a higher side of the recently listed diagnostic company. Companies’ majority revenue comes from Hyderabad. The total IPO issue size is Rs. 1894 crores, which consists of an offer for sale of 3.56 crores shares from promoters and investors.”
The company had quite an extensive network as it has around 80 diagnostics centres and 11 reference labs across 13 cities and towns in India. It has a presence in states such as Telangana, Andhra Pradesh, National Capital Region (NCR) and Kolkata. Around 96.2 per cent of the company’s revenue comes from Hyderabad according to reports. It also has certain strengths that might make it an attractive investment. It is relatively affordable with a wide network (as mentioned before), it is one of the fastest-growing chains with top-of-the-line technology and equipment, it has a high brand recall and its labs hold National Accreditation.
Gupta added, “Vijaya Diagnostic provides integrated services of pathology and radiology, company offers around 740 routine tests, 870 specialize pathology tests, 220 basic tests, and 320 advanced radiology tests. 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 center IPO.”
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