Vijaya Diagnostic Centre Limited had opened its initial public offering (IPO) on Wednesday and it completed its second day of trading on Thursday. The public issue was subscribed around 47 per cent on Friday or 0.47 times at the end of the second day of trading by investors. The public issue had received bids of 1.18 crore equity shares against its reduced offer size of 2.50 crore equity shares, according to data available on the stock exchanges. The Vijaya Diagnostic Centre IPO carried an issue size of Rs 1,895.04 core which consisted entirely of an offer for sale (OFS) that amounted to the same value. The issue originally had 35,688,064 equity shares with a face value of Rs 1 per equity share. The price of the IPO stood at Rs 522 to Rs 531 per equity share.
The grey market premium (GMP) for the issue stood at Rs 10 as per information on IPO Watch. This indicated that the issue was trading at a premium of Rs 532 to Rs 541 per equity share on the unlisted grey market.
In terms of investment, the retail investors were the investor category that had subscribed the most to the issue at 74 per cent or 0.74 times. Following the was the employee category, which had subscribed to the issue around 52 per cent or 0.52 times. The qualified institutional buyers (QIBs) had subscribed to the issue around 32 per cent or 0.32 times on day two of the issue. However, the non-institutional investors (NIIs) had only subscribed around 0.05 times on the second day.
Of the Rs 1,895 crore that the company aims to raise through the public issue, it had already managed to garner Rs 566 crore from its anchor investors a day prior to the issue opening. This amount was acquired at the upper end of the price band at Rs 531 per share on August 31. Since it is an OFS, all the proceeds from the IPO will go towards the selling of shareholders. Apart from the selling of its shares, the company is also aiming to list on the stock exchanges.
The issue is being promoted by S Surendranath Reddy. The promoters have a 60 per cent stake while the remainder is owned by Kedaara Capital, which is a private equity firm. After the completion of the OFS Kedaara would own a 10 per cent shareholding in the company.
Speaking on the position of the company, HDFC Securities said, “Vijaya Diagnostic Centre Ltd (VDCL) is the largest integrated diagnostic chain in southern India, by operating revenue, and also one of the fastest-growing diagnostic chain by revenue for fiscal year 2020.”
HDFC Securities added, “For the three months ended June 30, 2021, and the fiscal year 2021, it derived 95.91% and 96.20% of its revenue from operations from its core geographies, Hyderabad and rest of Telangana and Andhra Pradesh, respectively.”
Vijaya Diagnostic Centre had delivered revenue growth of 13 per cent CAGR for FY19-20. Hem Securities reported that it expects this company to grow at a CAGR of 12 per cent to 13 per cent by 2023.
Commenting on the scope of the company and the strength of the market, HDFC securities said, “The Indian diagnostics market was valued at approximately Rs. 710 billion to Rs. 730 billion in the fiscal year 2021, and is projected to grow at CAGR of around 12% to 13% to reach approximately Rs. 920 billion to Rs. 980 billion by fiscal year 2023 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.”
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