KRSNAA DIAGNOSTICS IPO

IPO Details:

Price Band: 933-954

Cutoff Price: 954

About Company:

Krsnaa is one of the largest differentiated diagnostic service provider in India. They provide a range of technology enabled diagnostic services, such as imaging (including radiology), pathology/clinical laboratory and tele-radiology services to public and private hospitals, medical colleges and community health centres pan-India. Krsnaa is the fastest growing diagnostic chain in India on multiple parameters. They also operate one of India’s largest tele-radiology reporting hubs in Pune that is able to process large volumes of X-rays, CT scans and MRI scans round the clock and 365 days a year, and allows them to serve patients in remote locations where diagnostic facilities are limited. They provide quality and inclusive diagnostic services at affordable rates across various segments. Since inception, we have served more than 23 million patients.

Competitive Strengths:

1. Unique and scaled diagnostics company;

2. Strong brand equity;

3. Extensive footprint across India with robust infrastructure;

4. Business model with robust revenue visibility;

5. Well positioned to capitalize on healthcare spending across public and private sectors;

6. Scalable and agile business model with efficient cost structure;

7. Consistent track record of financial performance;

8. Ability to maintain cost competitiveness through operating leverage;

9. Experienced promoters and management team supported by strong employee base.

Strategies:

1. Continue to expand presence across India;

2. Expand our offering of diagnostic services with a focus on specialized diagnostics;

3. Grow our digital footprint;

4. Maintain high social impact;

5. Continue to improve profitability and efficiency;

6. Expand our business and geographical footprint through opportunistic acquisitions.

Financial Performance:

Company's Revenue is increasing, and also Net Profit and EPS are increasing year on year. Company became net profitable in current fiscal and now they are coming out with IPO. This make one sceptical. With EPS of 36.26, the company's P/E is 13.6.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Financing cost of establishing diagnostic centres in different states

2. Repayment/Prepayment of borrowings

3. Offer for Sale

Competitors Comparison:

Krsnaa Diagnostics IPO seems to be undervalued based on the P/E ratio and Price to book value.

Grey Market Premium:

Our view: GMP of the IPO is decent and also the price is fairly valued after comparing it with listed competitors. We can expect this IPO to list at premium and hence I would be applying for this IPO for listing gains.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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