IPO News: Vijaya Diagnostic plans to offer up to 3.57 crore shares for sale

Diagnostic services have become the cornerstone of healthcare, especially for recommending treatments and monitoring post-treatment recovery. The diagnostics industry in India, valued at ₹710 to ₹730 billion in 2021, is projected to grow at a combined annual rate of 14- 16% to reach approximately ₹ 920-980 billion in 2023.

Vijaya Diagnostic recently filed its draft red herring prospectus with the Securities and Exchange Board of India. The company aims tо list its equity shares оn the stосk exchange by offering for sale 3,56,88,064 shares by the selling shareholders.

The face value of the shares will be ₹1 each. The company will not receive any proceeds from the offer as all the offer proceeds will be received by the selling shareholders, in proportion to the offered shares sold.

Company Business

Founded in 2002, Vijaya Diagnostic is southern India’s largest and fast-growing diagnostic chain, operating as a one-stop-shop for pathology and radiology testing services through its extensive operational network.

The company has 80 diagnostic centers and 11 reference laboratories across 13 cities and towns in the states of Telangana, Andhra Pradesh, the National Capital Region, and Kolkata.

The Hyderabad, Telangana-based company offers approximately 740 routine and 870 specialized pathology tests and approximately 220 basic and 320 advanced radiology tests that cover a range of specialties and disciplines.

The diagnostic giant has implemented a ‘hub and spoke’ model, whereby specimens are collected across multiple locations within a catchment area or a region for delivery to reference laboratories for diagnostic testing.

Financials

For the fiscal year 2021, Vijaya Diagnostic reported revenues of ₹3.8 billion and a profit of ₹849.11million. Cash generated from operation was ₹1.29 billion, with a return on capital employed of 42%.

Meanwhile, Vijaya Diagnostic is dependent on third parties to provide testing equipment and reagents. Any failure to continue to do so or recall of existing testing equipment and reagents could adversely affect the business and results of operations.