Vijaya Diagnostics Centre Ltd IPO (Vijaya Diagnostics IPO) Details
Hyderabad based Vijaya Diagnostics Centre is coming up with IPO now. The IPO would open for subscription on 1st September 2021. Vijaya Diagnostics Centre Limited is one of the fastest-growing diagnostic chains in Southern India. Company generated stable revenue growth in the last 3 years. Its margins are improving year on year. Should you invest in Vijaya Diagnostics IPO? What are the risk factors in this IPO?
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About Vijaya Diagnostics Centre Limited
Company is the largest integrated diagnostic chain in Southern India. In terms of revenue, it is one of the fastest growing diagnostic chain. It offers a one-stop solution for pathology and radiology testing services to its customers through its extensive operational network. Company has 81 diagnostic centres and 11 reference laboratories across 13 cities and towns in Telangana, Andhra Pradesh, NCR and Kolkata. Its revenues are approx. 95% in Telangana and Andhra Pradesh.
Vijaya Diagnostics IPO details
| IPO Opening Date | 01-Sep-21 |
| IPO Closing Date | 03-Sep-21 |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs 1 per equity share |
| IPO Price band | Rs 522 to Rs 531 per equity share |
| Lot Size | 28 Shares |
| Min Order Quantity | 28 Shares |
| Listing at | BSE and NSE |
| Issue Size | Total Size: Rs 1,895.04 Crores |
Vijaya Diagnostics IPO RHP link
What are Vijaya Diagnostics Centre Limited competitive strengths?
1) It is one of the largest and fastest-growing diagnostic chain in Southern India.
2) Affordable, one-stop solution diagnostics service provider with a focus on superior quality.
3) Company has strong technical capabilities, cutting-edge diagnostic testing technology and robust IT infrastructure.
4) Its laboratories hold National Accreditation.
5) High brand recalls driving high individual consumer business.
What are the Objects of the Offer?
Here are the objects of the offer.
1) Achieve the benefits of share listing on the Stock Exchanges.
2) To make an offer for sale (OFS) of 35,688,064 shares for Rs 1,895 Crores.
Who is the promoter of Vijaya Diagnostics Centre Limited?
Dr. S. Surendranath Reddy is the promoter of the company.
How is the company financial track record?
Here are the total assets, revenues and profits of the company in the last 3 years.
| Financial Year ending / Period ending (Amt in Mns) | |||
|---|---|---|---|
| Particulars | FY19 | FY20 | FY21 |
| Total Assets | 4,064.3 | 4,822.6 | 5,409.4 |
| Revenues | 3,029.4 | 3,541.8 | 3,885.9 |
| Profit After Tax | 462.7 | 625.1 | 849.1 |
| Profit % | 15.3% | 17.6% | 21.9% |
Why to invest in Vijaya Diagnostics IPO?
Here are the positive factors in this company.
1) Vijaya Diagnostic Centre is one of the fastest growing diagnostic chain in Southern India. Company has strong technical capabilities with robust IT Infrastructure.
2) Company posted stable revenue growth in the last 3 years. Its FY19, FY20 and FY21 revenues are at Rs 302.9 Crores, Rs 354.1 Crores and Rs 388.5 Crores respectively.
3) Company margins have improved year on year in the last 3 years. Its margins for FY19, FY20 and FY21 are at Rs 46.2 Crores, Rs 62.5 Crores and Rs 84.9 Crores respectively.
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Risk Factors in Vijaya Diagnostics IPO
1) Company will not receive any proceeds from this IPO. The entire proceeds from IPO would go to selling shareholders who are selling the shares.
2) Its business and prospects may be adversely affected if they are unable to maintain and grow its brand name and brand image.
3) Vijaya Diagnostic CEO, Sura Suprita Reddy was named in a criminal proceeding.
4) Company business, financial condition may get affected by global health epidemics like covid-19. The continuing effect of the same cannot be predicted.
5) Any interruptions at its flagship Centre and other diagnostic center’s may affect its ability to process diagnostic tests, which in turn can affect its business.
6) Company major business is in Telangana and Andhra Pradesh. Any loss of business in such regions can have adverse effect on its business
7) One of its subsidiaries MDSL was in non-compliance of the listing regulations. However, it has been rectified. Company also made a delayed filing under regulation 31(4) of the takeover regulations and relation to equity shares held by it in its capacity as a promoter of MDSL. There is no assurance that SEBI or BSE will not take any action in future.
8) There are outstanding legal proceedings involving company, subsidiaries and directors which may adversely affect company business.
9) Company have commissioned and paid for an industry report and its addendum to CRISIL specifically for the purpose of the IPO offer which are used for the industry related data in this RHP.
10) Its group companies have incurred losses in the past and may incur losses in the future too.
11) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.
Vijaya Diagnostics IPO dates for subscription, Allotment and Listing
| Offer Open | 01-Sep-21 |
| Offer close | 03-Sep-21 |
| Finalization of Allotment | 08-Sep-21 |
| Initiation of Refunds | 09-Sep-21 |
| Credit to Demat Account | 13-Sep-21 |
| IPO Shares Listing Date | 14-Sep-21 |
Is Vijaya Diagnostics IPO Price is underpriced or overpriced?
Its IPO price band is Rs 522 to Rs 531 per share.
1) On the upper price band of Rs 531 and last 3 years average EPS of Rs 6.92, the P/E ratio works out 77x.
2) If we take FY21 EPS of Rs 8.26, the P/E ratio works out 64x.
3) Means company is asking issue price in the P/E range of 64x to 77x.
4) Currently there are listed peers like Dr Lal Path Labs trading at P/E of 107x (highest) and Metropolis Healthcare trading at P/E of 74x (Lowest) and industry average is 90x. Hence considering the IPO price at Rs 531 at P/E of 64x to 77x is reasonably priced.
What is Vijaya Diagnostics IPO GMP?
Vijaya Diagnostics IPO GMP is not yet known as we could not see any major trades happening. GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about IPO price as it is unorganized market.
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Vijaya Diagnostics IPO – Review and Recommendation
I generally prefer Vijaya Diagnostic Centre for regular health check-ups owning to its brand. In fact, I am planning to go this Friday to their centre, and you might be reading this article when I am in their diagnostic centre.
Vijaya Diagnostics Centre Limited is the fastest growing diagnostic chain in Southern India. With its cutting-edge testing technology, it offers an one stop solution for pathology and radiology testing services to their customers through their extensive operational network.
While the revenues did not grow aggressively, it has posted stable revenue growth in the last 3 years.
Its margins are improving year on year.
The IPO share price is fully priced.
Recently we could see couple of IPOs were listed below the listing price. Looks the IPO party is over. Krsnaa Diagnostic IPO listed at 7% premium to IPO price, however today it is trading at 5% lower than the IPO price, hence don’t invest in any companies now for listing gains.
Considering the positive factors discussed above, investors can invest for medium to long term perspective. Based on current stock market conditions, one may not get listing gains.
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Thanks.
Best article on this website.
One of the rare candid and transparent analysis and observation.
Thanks Kamal.