2 min read.Updated: 02 Sep 2021, 09:15 AM ISTLivemint
Vijaya Diagnostic IPO is entirely an offer for sale (OFS) of 35,688,064 equity shares by the promoter
Healthcare chain Vijaya Diagnostic Centre's initial public offering (IPO) opened for subscription on Wednesday and the three-day public issue will conclude on Friday, September 3. The company has fixed the IPO price band at ₹522-531 per share. Vijaya Diagnostic Center is a prominent diagnostic chain in South India.
As on day one of the subscription opening, the issue has been subscribed 0.30 times, with retail investors category booked 0.46 times, employee reserved 0.24 times, and QIBs have bid 0.23 times, the BSE data showed.
The three-day issue opens on September 1 and closes on September 3 with price band of ₹522-531 apiece.
As per market observers, Vijaya Diagnostics grey market premium (GMP) today has fallen to ₹9. The grey market is an unofficial platform, wherein trading starts after the announcement of the IPO price band till the listing of the shares.
Vijaya Diagnostic Centre on Tuesday said it has raised a little over ₹566 crore from anchor investors ahead of its public offering (IPO). Fidelity Management Research, Fidelity Investments, Aberdeen, Abu Dhabi Investment Authority, Kuwait Investment Authority and Government Pension Fund Global are among the anchor investors.
The IPO is entirely an offer for sale 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.
The shares of the company are likely to list on the stock exchanges on September 14.
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 ₹84.91 crore compared to ₹62.5 crore in the preceding fiscal. Its total income rose to ₹388.59 crore from ₹354.18 crore. ICICI Securities, Edelweiss Financial Services and Kotak Mahindra Capital Company have been appointed as investment bankers for advising the company on its initial share sale.
ICICI Securities, Edelweiss Financial Services and Kotak Mahindra Capital Company are the book running lead managers to the issue.
“Based on FY21 numbers, IPO is priced at a price to earning of 64.3 times and EV/EBITDA of 30 times at the upper price band of the IPO, which is in line with the listed peer group. Company already has a higher market share in key geographics like Hyderabad and we do not expect the covid related benefit to continue in coming years. We believe that at ₹531, all the near term positives are priced in and leaves limited upside for the investors. Hence, we are assigning a NEUTRAL recommendation to the Vijaya Diagnostic centre limited IPO," said Yash Gupta, Equity Research Analyst, Angel Broking.
"The company has performed well over the years which is reflected in top & bottom line growth. On the upper band of 531, the asking P/E comes at around 64x which seems to be on higher side, also the issue is purely OFS and recent fiasco in primary markets have tumbled the sentiments of investors so it would be keen to watch for the subscription rush," said Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares.