Vijaya Diagnostic Centre Limited IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Vijaya Diagnostic Centre Limited
Rs 522 – Rs 531 per Equity share	Recommendation: Subscribe

Company Profile: –

Vijaya Diagnostic Centre limited (VDCL) is the largest integrated diagnostic chain in Southern India by operating revenue andprovides one-Stop solution for Pathology and Radiology Testing Services. Under Pathology Test Servicesranging from basic biochemistry and clinical Pathology to cytogenetics and high-end molecular diagnostic tests, and radiology tests ranging from basic echocardiograms, X-rays and ultrasounds to advanced radiology tests including computerized tomography (“CT”) scans, magnetic resonance imaging (“MRI”) scans, single photon emission computed tomography (“SPECT”) and advanced positron emission tomography CT (“PET CT”). It’s Operational Network  consist 81 diagnostic Centre and 11 reference laboratories across 13 cities and towns in the states of Telangana and Andhra Pradesh and in the National Capital Region and Kolkata as on June 30, 2021.

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Issue Details
Objects of the issue	· To achieve the benefit of listing on stock exchange ·  To make an offer for Sale of 35,688,064 Shares .
Issue Size	Total issue Size – Rs. 1895.04Cr. Offer for Sale – Rs. 1895.04Cr.
Face value	Rs.1.00 Per Equity Share
Issue Price	Rs. 522 – Rs. 531
Bid Lot	28 shares
Listing at	BSE, NSE
Issue Opens:	1st Sep, 2021 – 3rd Sep, 2021
QIB	50% of Net Issue Offer
Retail	35% of Net Issue Offer
NIB	15% of Net Issue Offer

Financial Performance:

 

 

 

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	59.78%	54.78%
Public	40.22%	45.22%

Source: RHP, EWL Research

Strengths:

• Fastest and largest growing Diagnostic chain with dominant position in south India.
• Strong and consistent financial Performance.
• Integrated diagnostics provider that offers one-stop solution at affordable price.
• Higher and Consistent margins.

Key Highlights:

• Revenuefrom operationsstood at Rs. 376.75 crore in FY21 grew at a CAGR of 13.5% between FY19 and FY21.
• Individual Consumer Business contributed around 92% of the Total Revenue.
• Net profit Stood at Rs.84.91 crore grow at a CAGR of 35.46% from FY19 to FY21.
• EBITDA Margin was 47.22% in FY21 vs 43.68% in FY20
• Company has significantly reduced it’s debt in FY21 from Rs.32.84 crore to Rs.4.47 crore Which makes the Company virtually debt free.
• CFO/PAT stands at 1.54as of 30^th June FY22.

Risk Factors:

• The company’s operations are concentrated in south India, and any loss of business in such region could have an adverse effect on their business, results of operations and financial condition.
• VDCL CEO, Sura Suprita Reddy was named in a criminal proceeding.

Outlook:

VDCL is a Diagnostic company that generates its revenue from Pathology and Radiology Testing Services. It offers a comprehensive range of approximately 1,610 pathology tests and follow ‘hub and spoke’ model in which specimens to be collected across multiple locations within a catchment area or a region for delivery to  reference laboratories for diagnostic testing that provides greater economies of scale and enhances consistency of testing procedures to the company.The Indian diagnostics market was valued at approximately Rs.71000crore to Rs.73000 crore in FY 2021, and is projected to reach approximately Rs.92000crore to Rs.98000crore byFY23, driven by rise in health awareness and disposable incomes, increase in demand for better healthcare facilities and quality of care of individuals, and increase in spending on preventive and wellness. The diagnostics market in Telangana and Andhra Pradesh, in which company have significant presence in, is projected to grow to approximately Rs.120 billion to Rs.130 billion by FY23.At the higher price band of Rs 531, the offer is made at P/E multiple of 63.97 times on Post Issue equity basis which is lower among peers like Dr. Lal Path labs and Metropolis health care which are trading at a P/E of 115 Times and 79.20 Times.Thus, We recommend Subscribe to the IPO for longer term.

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