{"id":4293,"date":"2021-08-31T20:09:22","date_gmt":"2021-08-31T14:39:22","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=4293"},"modified":"2022-05-24T19:14:39","modified_gmt":"2022-05-24T13:44:39","slug":"vijaya-diagnostics-ipo","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/","title":{"rendered":"Vijaya Diagnostics IPO Opening Up Tomorrow \u2013 Should You Subscribe?"},"content":{"rendered":"\n<p>It is the last month of Q3 and the <a href=\"https:\/\/www.tickertape.in\/blog\/most-successful-ipos-in-the-last-3-years\/?utm_source=blog&amp;utm_medium=article\">IPO<\/a> season is still on the run! Among other companies, Vijaya Diagnostic Centre Ltd. (VDCL) is making a head start by hitting the market on 1 September, 2021 with its initial public offering (<a href=\"https:\/\/www.tickertape.in\/blog\/ipo-investment\/\">IPO<\/a>). Amidst COVID-19, hospitals and diagnostic centres boomed. One-stop radiology and pathology testing services, affordable prices and a wide variety of health packages give the company a competitive edge in Southern India.<\/p>\n\n\n\n<p>Further, rapidly growing Vijaya Diagnostic Centre Ltd. reported a better profit after tax (PAT) in FY 2020 compared to the previous fiscal. However, the company has reported certain internal and external risks that might affect its future financials. Trawl through this article to access details for analysing Vijaya Diagnostics IPO.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#About-Vijaya-Diagnostics\" title=\"About Vijaya Diagnostics\">About Vijaya Diagnostics<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Operations-of-the-company\" title=\"Operations of the company\">Operations of the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Services-of-VDCL\" title=\"Services of VDCL\">Services of VDCL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Promoter-and-investors-exiting-their-shares\" title=\"Promoter and investors exiting their shares\">Promoter and investors exiting their shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#About-Vijaya-Diagnostics-IPO\" title=\"About Vijaya Diagnostics IPO\">About Vijaya Diagnostics IPO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Book-running-lead-managers-and-registrar-of-the-IPO\" title=\"Book running lead managers and registrar of the IPO\">Book running lead managers and registrar of the IPO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Reservation-of-IPO-for-various-investor-categories\" title=\"Reservation of IPO for various investor categories\">Reservation of IPO for various investor categories<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Utilisation-of-the-IPO-proceeds\" title=\"Utilisation of the IPO proceeds\">Utilisation of the IPO proceeds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Financials-of-VDCL\" title=\"Financials of VDCL\">Financials of VDCL<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Peer-comparison\" title=\"Peer comparison\">Peer comparison<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Strengths-of-the-company\" title=\"Strengths of the company\">Strengths of the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Risks-of-the-Vijaya-Diagnostics\" title=\"Risks of the Vijaya Diagnostics\">Risks of the Vijaya Diagnostics<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/vijaya-diagnostics-ipo\/#Prospects-of-the-company\" title=\"Prospects of the company\">Prospects of the company<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"about\"><span class=\"ez-toc-section\" id=\"About-Vijaya-Diagnostics\"><\/span><strong>About Vijaya Diagnostics<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Vijaya Diagnostic Center Ltd. (VDCL) is Southern India&#8217;s largest integrated diagnostic chain based on operating income and was one of the rapidly expanding diagnostic chains in FY 2020. Its broad operating network includes diagnostic centres and reference laboratories spanning across several geographical regions. They focus on providing clients with a one-stop solution for pathology and radiology testing services.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"of\"><span class=\"ez-toc-section\" id=\"Operations-of-the-company\"><\/span><strong>Operations of the company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The company\u2019s broad operating network includes 81 diagnostic centres and 11 reference laboratories spanning 13 cities and towns in Telangana, Andhra Pradesh, the National Capital Region, and Kolkata. Of these regions, Hyderabad, Telangana, and Andhra Pradesh account for 96.2% of the total revenue.<\/p>\n\n\n\n<p>For the fiscal ending 31 March, 2021, the firm performed roughly 62 lakh pathology tests and 8.9 lakh radiology tests for approximately 26.3 lakh consumers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"services\"><span class=\"ez-toc-section\" id=\"Services-of-VDCL\"><\/span><strong>Services of VDCL<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Pathology tests on the company&#8217;s menu range from basic biochemistry and clinical pathology to cytogenetics and high-end molecular diagnostic testing. The company lets customers choose from a variety of health and wellness packages tailored to their specific needs.<\/p>\n\n\n\n<p>VDCL has adopted a strategy, in which specimens are collected from numerous sites within a catchment area or region and sent to reference laboratories. This methodology improves the uniformity of testing processes and outcomes while providing higher economies of scale. It also offers value-added services such as specimen collection at home, house calls, and a variety of delivery or access options.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"and\"><span class=\"ez-toc-section\" id=\"Promoter-and-investors-exiting-their-shares\"><\/span><strong>Promoter and investors exiting their shares<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The company&#8217;s promoter is Dr S. Surendranath Reddy. It is worth emphasising that the issue is purely an <a href=\"https:\/\/www.tickertape.in\/blog\/offer-for-sale\/\">offer for sale<\/a>. Private <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> investors Karakoram Limited and Kedaara Capital will be left with a stake of 10% after exiting via the IPO.<\/p>\n\n\n\n<p>Below is a chart depicting the change in the pre- and post-issue promoter shareholding:<\/p>\n\n\n\n<iframe loading=\"lazy\" width=\"600\" height=\"400\" src=\"https:\/\/live.amcharts.com\/AyNDJ\/embed\/\" frameborder=\"0\"><\/iframe>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"vijaya\"><span class=\"ez-toc-section\" id=\"About-Vijaya-Diagnostics-IPO\"><\/span><strong>About Vijaya Diagnostics IPO<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Vijaya Diagnostic Centre Limited&#8217;s IPO is worth 1,894.26 cr<\/li><li>The subscription period for Vijaya Diagnostic IPO begins on 1 September, 2021, and ends on 3 September, 2021<\/li><li>The business is aiming for a market capitalization of Rs 5,414.39 cr based on the top price range<\/li><li>VDCL IPO will be listed on the <a href=\"https:\/\/www.tickertape.in\/blog\/difference-between-nse-and-bse\/?utm_source=blog&amp;utm_medium=article\">BSE<\/a> and <a href=\"https:\/\/www.tickertape.in\/blog\/national-stock-exchange\/?utm_source=blog&amp;utm_medium=article\">NSE<\/a><\/li><li>The IPO consists of an offer for sale of 35,688,064 shares<\/li><li>The size of the IPO lot is 28 shares, with a price band set at Rs 522-531<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"the\"><span class=\"ez-toc-section\" id=\"Book-running-lead-managers-and-registrar-of-the-IPO\"><\/span><strong>Book running lead managers and registrar of the IPO<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>ICICI Securities Limited, Edelweiss Financial Services Limited, and Kotak Mahindra Capital Company Limited are the lead managers for this issue. The registrar for this issue is KFin Technologies private Limited (KFintech).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"various\"><span class=\"ez-toc-section\" id=\"Reservation-of-IPO-for-various-investor-categories\"><\/span><strong>Reservation of IPO for various investor categories<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The maximum subscription amount reserved for retail investors is Rs. 2,00,000. The firm is providing an employee discount of Rs 52 per share. 1,50,000 <a href=\"https:\/\/www.tickertape.in\/blog\/what-are-equity-shares-meaning-types-features-limitations-and-more\/\">equity shares<\/a> are reserved for the eligible employees of the company. Rest, Qualified institutional buyers (QIBs) get 50%, 15% is reserved for High <a href=\"https:\/\/www.tickertape.in\/blog\/net-worth\/\">net worth<\/a> individuals (HNIs) and 35% for retail investors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"utilisation\"><span class=\"ez-toc-section\" id=\"Utilisation-of-the-IPO-proceeds\"><\/span><strong>Utilisation of the IPO proceeds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The proceeds from this IPO will completely belong to the two investors who are selling the shares. That means VDCL cannot use these funds for operations or expansion.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"financials\"><span class=\"ez-toc-section\" id=\"Financials-of-VDCL\"><\/span><strong>Financials of VDCL<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The entire revenue reported by Vijaya Diagnostics was Rs 122.69 cr (Rs 51.70 cr for Q1 of FY 2021).<\/li><li>PAT for the same quarter was Rs 33.33 cr<\/li><li>In FY 2021, total revenue grew by 10% to Rs 388.59 cr, up from Rs 354.18 cr in FY 2018. This was attributed to the higher income from COVID RT-PCR testing and the opening of seven new diagnostic facilities.<\/li><li>PAT increased from Rs 62.51 cr in FY 2020 to Rs 84.91 cr in FY 2021.<\/li><li>Vijaya Diagnostics&#8217; balance sheet shows that the firm has no debt.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"468\" src=\"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Vijaya-IPO-table-1024x468.png\" alt=\"\" class=\"wp-image-4301\" srcset=\"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Vijaya-IPO-table-1024x468.png 1024w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Vijaya-IPO-table-300x137.png 300w, https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Vijaya-IPO-table.png 1089w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"peer\"><span class=\"ez-toc-section\" id=\"Peer-comparison\"><\/span><strong>Peer comparison<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The issue is valued at 41.10 times its earnings, with an annualised <a href=\"https:\/\/www.tickertape.in\/blog\/earnings-per-share\/?utm_source=blog&amp;utm_medium=article\">EPS<\/a> of 12.92 per share computed at Rs 531 per share. The <a href=\"https:\/\/www.tickertape.in\/blog\/pe-ratio\/?utm_source=blog&amp;utm_medium=article\">P\/E<\/a> ratio of the industry peer group is 90.8x, indicating that the issue is priced competitively. Price to Book Value (P\/BV) is 13.78x with a NAV of Rs 38.53 per share.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"strengths\"><span class=\"ez-toc-section\" id=\"Strengths-of-the-company\"><\/span><strong>Strengths of the company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>VDCL is Southern India&#8217;s largest and fastest-growing diagnostic network.<\/li><li>It provides affordable, one-stop solution diagnostics with an emphasis on excellent quality.<\/li><li>Technical prowess, cutting-edge diagnostic testing technologies, and a solid IT infrastructure.<\/li><li>Individual consumer business is being driven by increasing brand recalls.<\/li><li>All Vijaya Diagnostic Centre Ltd. laboratories have NABL certification as of 31 March, 2021, plus three diagnostic facilities have Patient Safety &amp; Quality of Care accreditation.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"risks\"><span class=\"ez-toc-section\" id=\"Risks-of-the-Vijaya-Diagnostics\"><\/span><strong>Risks of the Vijaya Diagnostics<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Although the firm\u2019s brand is reputed in South India, a failure to capture other regional markets due to COVID-19 would limit the company&#8217;s growth.<\/li><li>The company, its directors and subsidiaries have a few outstanding legal proceedings.<\/li><li>Its CEO was named in a criminal proceeding.<\/li><li>The firm\u2019s subsidiaries have incurred loss in the past and the same may happen in the future.<\/li><li>The company cited that if procurement of testing machinery gets delayed, operations might get affected.<\/li><li>The company would need licenses to undergo expansion. Any delay in the receipt would affect the operations.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"company\"><span class=\"ez-toc-section\" id=\"Prospects-of-the-company\"><\/span><strong>Prospects of the company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the future, Vijaya Diagnostic Centre Limited wishes to expand to other states as well.<\/p>\n\n\n\n<p>Before subscribing to Vijaya Diagnostic Centre Limited\u2019s IPO, do your own research. If you think it&#8217;s a good investment, make sure you read up on <a href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-ipos\/?utm_source=blog&amp;utm_medium=article\">how to subscribe to an IPO<\/a> so you have a smooth experience.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>South India\u2019s dominant integrated diagnostic chain, Vijaya Diagnostics IPO is opening tomorrow. Read this article to assess this opportunity.<\/p>\n","protected":false},"author":54,"featured_media":4302,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[9,1727],"tags":[227,208,691,692,693,694],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/08\/Vijaya-IPO.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/4293"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/54"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=4293"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/4293\/revisions"}],"predecessor-version":[{"id":8742,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/4293\/revisions\/8742"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/4302"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=4293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=4293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=4293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}