The initial public offering of Krsnaa Diagnostics, one of the fastest-growing diagnostic chains in India, was subscribed 64.40 times on August 6, the last day of the bidding, the subscription data available on exchanges shows.
The offer received bids for 45.79 crore equity shares against the IPO's size of 71.12 lakh shares.
Retail investors once gain lapped up the offer, putting in bids 42.03 times their reserved portion. The employees' portion has been subscribed 98 percent.
The portion set aside for qualified institutional buyers was subscribed 49.83 times, while non-institutional investors have put in bids 116.30 times their allotted shares.
Krsnaa Diagnostics is looking to raise Rs 1,213.33 crore through the offer, of which Rs 537 crore has already been raised from anchor investors.
The company offers a range of diagnostic services such as imaging, radiology services (X-rays, MRI, CT scan, etc), routine clinical laboratory tests, pathology, and teleradiology services. It has expanded its reach by opening 1,131 diagnostic centres (892 radiology centres and 239 pathology labs), taking the number of diagnostic centres to 1,830 in 14 states.
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Ventura Securities initiated coverage with “subscribe” for long-term investing. "With a strong countrywide network and dominant position in the public-private partnership (PPP) space, the company has strong moats around its business. We believe that the company is a good bet to benefit from growing demand for diagnostic centres in Tier II & III cities," the brokerage said.
During FY18-21, the company's revenue, EBITDA / adjusted PAT grew at a CAGR of 54.5 percent, 50.0 percent, and 102.2 percent, respectively. However, EBITDA margins deteriorated by 218bps to 23.7 percent due to a rise in the sourcing cost of medical consumables, which resulted in a 202bps decline in return on capital employed to 19.5 percent in FY21.
Also read: Krsnaa Diagnostics IPO; 10 things to know about the public issue
"We expect Krsnaa Diagnostics to grow its revenue at a CAGR of 39.8 percent to Rs 1,083 crore over the period of FY21-24. EBITDA and PAT over the same period are set to grow at a CAGR of 41.1 percent to Rs 264 crore and 71.5 percent to Rs 161 crore, respectively," said Ventura Securities.
The company is planning to open 31 diagnostic centres in Punjab, Karnataka, Himachal Pradesh and Maharashtra in FY22 and FY23 at an estimated capex of Rs 151 crore.
Also read: Krsnaa Diagnostics IPO: Should you subscribe?
Grey market premium
Krsnaa Diagnostics shares were trading at a premium of Rs 370-380 in the grey market, the IPO Watch and IPO Central data showed.
This translates to a trading price of Rs 1,324-1,334 a share, 38.8-39.8 percent over the higher end of the IPO price band of Rs 954.
The grey market is an unofficial trading platform where shares are traded well before the allotment and listing on bourses.
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