Vijaya Diagnostic makes tepid stock market debut, shares list at 2% premium

By Ravindra N. Sonavane
Vijaya Diagnostic is the largest integrated diagnostic chain in southern India, by operating revenue, and also among the fastest-growing by revenue for fiscal 2020

MUMBAI: Shares of Vijaya Diagnostic Centre Ltd made a weak stock market debut on Tuesday, listing at 2% premium over the issue price.

The stock listed at Rs542.30 apiece on the BSE, up 2.3% from its issue price of Rs531. At 1005am, shares traded at Rs566.70.

The Kedaara Capital-backed diagnostic chain's initial public offering (IPO) saw tepid response. The issue comprised an offer for sale of 35.69 million shares by existing shareholders and promoters, including Dr S Surenranath Reddy, Karakoram and Kedaara Capital Alternative Investment Fund - Kedaara Capital AIF I. Shares were sold in the price band of 522-531 apiece.

It currently trades at P/E multiple of 64 times on FY21 PAT basis, analysts say.

“We like integrated business model of company due to which company has posted superior financial performance. Its EBITDA margin ranked second among other major diagnostics along with negative working capital and high cash flow generation leading to strong net cash position. Also company’s strategy of expanding in Telangana and Andhra Pradesh which are expected to grow at CAGR of 12% to 13% by 2023 will be next growth driver for company", said Hem Securities in a note to its investors.

It is the largest integrated diagnostic chain in southern India, by operating revenue, and also among the fastest-growing by revenue for fiscal 2020. It has an extensive operational network, comprising 80 diagnostic centres and 11 reference laboratories across 13 cities and towns Telangana, Andhra Pradesh, the national capital region and Kolkata.


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