VIJAYA DIAGNOSTIC IPO

IPO Details:

Price Band: 522-531

Cutoff Price: 531

About Company:

Vijaya 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. Vijaya offers a one-stop solution for pathology and radiology testing services to the customers through thei extensive operational network, which consists of 81 diagnostic centres and 11 reference laboratories across 13 cities and towns in the states of Telangana and Andhra Pradesh and in the National Capital Region and Kolkata as on June 30, 2021.

Competitive Strengths:

1. Largest and Fastest Growing Diagnostic Chain with Dominant Position in South India, Well Positioned to Leverage the High Growth in Indian Diagnostics Industry;

2. Integrated Diagnostics Provider that Offers One-Stop Solution at Affordable Price with a focus on superior quality standards;

3. High Brand Recall driving High Individual Consumer Business Share and Customer Stickiness;

4. Strong technical capabilities, quality infrastructure and state-of-the-art medical technology with strong IT infrastructure;

5. Dedicated management team with significant industry experience.

Strategies:

1. Deep Footprint in Core Markets;

2. Leveraging Existing Presence by Focusing on Setting up Spoke Centres and Increasing Home Collection in Existing Catchment Areas;

3. Continue to Focus on Providing Customer Centric Services and Offerings;

4. Expand in Adjacent Geographies and East India;

5. Supplement Organic Growth with Selective Acquisitions.

Financial Performance:

Company's Revenue is increasing, and also Net Profit and EPS are increasing year on year. Company is net profitable. With EPS of 8.3, company cutoff price is at 64.

Objects of the Issue:

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

1. Offer for Sale

Competitors Comparison:

Vijaya Diagnostic IPO seems to be overvalued based on the P/E ratio and undervalued based on Price to book value.

Grey Market Premium:

Our view: GMP of the IPO is less and also the price seems to be overvalued after comparing it with listed competitors. I won't subscribe to this IPO as the GMP is not good and IPO seems to be overvalued.

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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