Technology-enabled diagnostic services provider Krsnaa Diagnostics will launch its initial public offering (IPO) tomorrow, August 4. It is among four public issues to open on August 4 along with Devyani International, Windlas Biotech, and Exxaro Tiles.
Here are 10 key things to know before subscribing to the public issue:
1) IPO Dates
The offer will open from August 4-6. Anchor book, if any, will open for investors for a day on August 3.
2) Public Issue
The initial public offering comprises a fresh issue of Rs 400 crore and an offer for sale of 85,25,520 equity shares by selling shareholders.
The offer for sale consists of sale of 16 lakh equity shares by PHI Capital Trust-PHI Capital Growth Fund-I; 33,40,713 equity shares by Kitara PIIN 1104; 35,63,427 equity shares by Somerset Indus Healthcare Fund I; and 21,380 equity shares by Lotus Management Solutions (acting through Mayur Sirdesai).
The offer includes a reservation of Rs 20 crore worth of shares for employees, who will get a discount of Rs 93 per share to the final issue price.
3) Price Band and Fund Raising
The price band for the offer has been fixed at Rs 933-954 per equity share. The IPO size comes to Rs 1,213.33 crore at the higher end of the price band.
4) Objectives of Issue
Krsnaa Diagnostics will utilise net proceeds from the fresh issue for establishing diagnostics centres in Punjab, Karnataka, Himachal Pradesh and Maharashtra, repayment of borrowings, and general corporate purposes.
The company will not receive funds from the offer for sale as the money will go to selling shareholders.
5) Lot Size and Investors' Reserved Portion
Investors can bid for a minimum of 15 equity shares and in multiples of 15 equity shares thereafter. With this, the minimum investment by the retail investors would be Rs 14,310 per lot and the maximum would be Rs 1,85,445 for 13 lots as retail investors are allowed to invest up to Rs 2 lakh in IPO.
75 percent of the offer size has been reserved for qualified institutional buyers, 15 percent for non-institutional bidders, and 10 percent for retail investors.
6) Company Profile
Krsnaa Diagnostics is one of the largest differentiated diagnostic services providers in India. It provides a range of technology-enabled diagnostic services such as imaging (including radiology), pathology/clinical laboratory and teleradiology services to public and private hospitals, medical colleges and community health centres across India.
Since its inception, it has served more than 2.3 crore patients.
The company has an extensive network of integrated diagnostic centres across India primarily in non-metro and lower-tier cities and towns. As of June 2021, it operated 1,823 diagnostic centres offering radiology and pathology services in 13 states across India.
The company focuses on the public-private partnership (PPP) diagnostics segment and has the largest presence in the diagnostic PPP segment. As of June 2021, it has deployed 1,797 diagnostic centres pursuant to PPP agreements with public health agencies. In addition to the PPP segment, it has been growing collaboration with private healthcare providers to operate diagnostic centres within their facilities and has operated 26 such diagnostic centres.
As of June 2021, it had a team of 190 radiologists, 30 pathologists, eight microbiologists and more than 2,800 qualified professionals including clinicians, technicians and operators.
7) Strengths and Strategies
a) Unique and scaled diagnostics company;
b) Krsnaa brand is associated with providing quality and reliable healthcare services at affordable prices;
c) Extensive footprint across India with a robust infrastructure;
d) Operations across radiology and pathology provide it with diversified sources of revenue;
e) Well-positioned to capitalize on healthcare spending across public and private sectors;
f) Scalable and agile business model with an efficient cost structure;
g) Consistent track record of financial performance;
h) Ability to maintain cost competitiveness through operating leverage;
i) Experienced promoters and management team supported by a strong employee base.
a) Expand the network of diagnostic centres and services within India and in particular increase presence in geographies where it is currently present;
b) Enhance capabilities in specialized diagnostic services such as molecular diagnostics and genomics;
c) Increase touchpoints and engagement with customers through various digital and technology initiatives;
d) Increase branding and marketing initiatives to promote the Krsnaa brand further;
e) Continue to improve profitability and efficiency;
f) Augment growth by pursuing selective acquisitions and strategic alliances.
Krsnaa Diagnostics is the fastest growing diagnostic chain in India on multiple parameters including operating income, operating profit before depreciation, interest and tax (OPBDIT) and profit after tax.
It has demonstrated consistent growth in terms of revenues and adjusted EBITDA over the years. Its net revenue from operations increased at a CAGR of 37.65 percent during FY19-FY21.
In the last three fiscals, it has not incurred any write-offs and has not had any bad debts. It has consistently generated positive cash flows from operating activities.
The company has reported a profit of Rs 184.93 crore in FY21 against a loss of Rs 111.95 crore in FY20 and a loss of Rs 58.06 crore in FY19.
9) Promoters and Management
Promoter Rajendra Mutha holds a 29.53 percent stake in the company. Promoter and promoter group's shareholding currently stands at 31.62 percent.
Among major investors, Phi Capital holds 23.42 percent stake in the company, Somerset 16.38 percent, and Kitara 16.38 percent stake.
Rajendra Mutha is the Executive Chairman of the Board of Directors and the whole-time Director of the company. He is a registered pharmacist certified by the Maharashtra State Pharmacy Council with over 10 years of experience in pharmacy and diagnostics.
Pallavi Bhatevara is the Managing Director of the company. She has 8 years of experience in the field of diagnostic services. She is currently responsible for the expansion and growth of the company and is involved in the tendering process and implementation and execution of projects.
Yash Mutha is a whole-time Director of the company. He has over 12 years of experience in the field of audit and risk management. He is currently responsible for internal audit, risk review and development of business processes. Prior to joining the company, he was associated with BSR & Co. LLP as assistant manager (audit), Deloitte as senior manager (audit), KPMG as a governance and risk compliance services manager and Credit Suisse Services (India) as assistant vice president.
Prem Pradeep is the Non-Executive Nominee Director. Chhaya Palrecha, Chetan Desai, Prakash Iyer, and Rajiva Ranjan Verma are Non-Executive Independent Directors on the board.
Pawan Daga is the Chief Financial Officer of the company. He is currently responsible for financial control and accounts of the Company. He has over 8 years of experience in the field of finance and accounts. Prior to joining the company, he was associated with Shree Sant Kripa Appliances (Syska) as Deputy Manager Accounts and Pisces eServices Private Limited (Foodpanda) as Finance Manager.
10) Allotment, refunds and listing dates
Krsnaa Diagnostics will finalise the IPO share allotment on August 11, and the funds will be refunded or unblocked from the ASBA account on August 12, 2021.
Equity shares issued will be credited to demat accounts of eligible investors on August 13, and trading will commence from August 17.
Equity shares are proposed to be listed on both BSE and NSE. JM Financial, DAM Capital Advisors, Equirus Capital, and IIFL Securities are the book running lead managers to the issue.