The issue received bids for 4,36,35,885 shares against 71,12,099 shares on offer. The IPO is being sold in the Rs 933-954 price band with asking valuations coming in at 77 times FY21 earnings per share. If successful, the company would command a post-issue market cap of Rs 2,994 crore.
Ventura Securities said Krsnaa Diagnostics has strong moats around its business with a strong countrywide network and dominant position in the PPP space. “We believe that the company is a good bet to benefit from growing demand for diagnostic centers in Tier II & III cities,” it siad.
Geojit Financial Services said that the stock is demanding a P/E of 95 times on a diluted basis, which appears highly expensive when compared with peers.
“Considering its unique business model with cost advantage and plans for standalone centres, the company’s revenue visibility for the future looks promising. We provide “Subscribe” on a short term view for listing gain,” it said.
The company on Tuesday allocated 56,28,937 shares to 44 anchor investors at Rs 954 apiece, aggregating to Rs 537 crore.
Krsnaa is a large and differentiated diagnostic service provider, which offers a range of technology-enabled diagnostic services such as imaging, pathology and teleradiology services to public and private hospitals, medical colleges and community health centres pan-India. The company focuses on the public-private partnership (PPP) diagnostics segment and has the largest presence in the diagnostic PPP segment.
Religare Securities said that Krsnaa is well placed to benefit from growing industry trends on the back of its scale, strong brand equity, and extensive footprint across India.
It noted that the company’s PPP agreements, which deploy diagnostic centres for its radiology and pathology services, are typically long-term contracts that ensure visibility of revenues for its operations.
The company plans to expand its network of diagnostics centres and also expand its offerings of diagnostic services. It also plans to increase its digital footprint and continue to focus on improving its profitability and efficiency.
“The financial performance has been healthy for the company. With promising industry growth prospects coupled with the company’s strong execution track record, we have a positive on the company for long term,” the brokerage said.
