Vijaya Diagnostic Centre IPO will open for subscription on 1 September 2021 and close on 3 September.
Vijaya Diagnostic Centre IPO will open for subscription on 1 September 2021 and close on 3 September. The issue is entirely an offer-for-sale (OFS) of 3.56 crore shares by the selling shareholders, comprising up to 50.98 lakh shares by Dr S Surendranath Reddy, up to 2.94 crore equity shares by Karakoram Ltd and up to 11.02 lakh shares by Kedaara Capital Alternative Investment Fund — Kedaara Capital AIF 1. The public issue also includes the reservation of up to 1.5 lakh equity shares for eligible employees.
ICICI Securities, Edelweiss Financial Services and Kotak Mahindra Capital Company have been appointed as investment bankers for advising the company on its IPO. KFin Technologies Private Ltd is the registrar to the issue. Upon successful listing, Vijaya Diagnostic Centre will join the likes of Dr. Lal Path Labs, and Metropolis Healthcare. The industry peer group P/E ratio stands at 90.8, and the weighted average on return on net worth is at 23.14 per cent.
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Vijaya Diagnostic Centre said that as the offer consists only of an offer for sale by the Selling Shareholders, there will be no change in the net worth post-completion of the offer. Kedaara Capital-backed Vijaya Diagnostic Centre offers one-stop solution for pathology and radiology testing services to customers through its extensive network, which consists of 80 diagnostic centres and 11 reference laboratories across 13 cities and towns in the states of Telangana and Andhra Pradesh, and the National Capital Region and Kolkata.
For the financial year ended March 2021, the company posted a profit of Rs 84.91 crore compared to Rs 62.5 crore in the preceding fiscal. Its total income rose to Rs 388.59 crore from Rs 354.18 crore. The company will not receive any proceeds from the OFS. The Selling Shareholders will receive the net proceeds from the OFS.
Diagnostic services currently have an 8 to 14% share in the overall healthcare spending on account of variation between rural and urban across institutions such as government-owned, charitable/trust-based and private. With diagnostic services becoming the cornerstone for recommending requisite treatments, as well as monitoring recovery posttreatment, the industry has posted healthy growth over the past few years. Between fiscal years 2020 and 2023, the industry is expected to return to a healthy growth trajectory of 12 to 13% CAGR, reaching ₹ 920 to 980 billion. The industry is however expected to achieve a higher CAGR between fiscal year 2021 and fiscal year 2023 in the range of 14 to 16% on account of a low growth in fiscal year 2021 due to the COVID-19 pandemic impact on the industry.