Vijaya Diagnostic Centre has raised Rs 566.12 crore from 29 anchor investors ahead of its IPO (initial public providing). The South-India based firm has allocated 1,06,61,418 shares at the upper value band at Rs 531 per equity share to anchor investors such as Goldman Sachs, CLSA, Fidelity International, and Abu Dhabi Investment Authority. The IPO opens for subscription today and will stay open till the finish of the week. Vijaya Diagnostic is hunting to raise Rs 1,894 crore by means of the public concern of equity shares in the value band of Rs 522-531 per share.
Goldman Sachs, Fidelity, ADIA choose stake
The biggest stake amongst anchor investors has been picked up by Fidelity Investment Trust. A total of 8.68 lakh shares have been allocated to Fidelity Investment Trust, which is 8.15% of the total anchor portion, for Rs 43.13 crore. Goldman Sachs Singapore has picked up 5.28% of the complete anchor portion or 5.63 lakh shares. Abu Dhabi Investment Authority has purchased 4.5 lakh shares for Rs 23.89 crore. DSP Healthcare Fund purchased 4.68 lakh shares of Vijaya Diagnostic by means of the anchor portion, the biggest amongst domestic mutual fund schemes. Other domestic investors contain SBI, Edelweiss, Axis Mutual Fund, Nippon Life, Kotak Mahindra, and ICICI Prudential.
What do analysts say?
Choice Broking: Avoid
VDCL has presence in each diagnostic and radiology segment on the other hand its peers mostly have presence in diagnostic small business only. The corporation is a regional player, deriving about 95% of its small business from Andhra Pradesh & Telangana area, when its peers are largely multi-regional. VDCL mainly derives virtually all of its small business from stroll-in clients, which is considerably larger than its peers. The diagnostic sector will continue to have a secular development trend with fantastic money flow generation capabilities. However, increasing healthcare expenses could place pressure on profitability of the sector. At larger value band of Rs. 531, VDCL is demanding a TTM P/E a number of of 47x, which is in-line to the peer typical. Thus the concern appears to be completely priced. Thus we assign a “AVOID” rating for the concern.
IIFL Securities: Subscribe Now
At the upper value band, Vijaya Diagnostic Centre Limited is demanding a PE a number of of ~64.3X of FY21 earnings which is reduced than the business typical of 90.8X. Considering the future development possible of healthcare business, income from operation, EBITDA and PAT development of 13.5%, 23.9% and 35.5% CAGR in the course of FY19 to FY21, respectively, powerful ROE and ROCE of 23.64% and 42%, respectively in FY21, debt-free of charge corporation with plans for acquisition and expansions, diversified service offerings and powerful technical capabilities of the corporation, we suggest ‘Subscribe’ to the concern with a lengthy-term viewpoint.
: Vijaya Diagnostic IPO opens tomorrow grey marketplace premium weak, really should you subscribe?
Reliance Securities: Subscribe from lengthy term viewpoint
The IPO is valued at 64x of FY21 earnings, which seems to be at a discount of 15-40% compared to the valuation of its peers like Metropolis and Dr. Lal PathLab. However, taking into consideration its annualized earnings for FY22E, it is priced at 41x, which appears affordable. We additional think lukewarm efficiency to Krsnaa Diagnostic post listing (IPO was valued at 16x of FY21 earnings), the investors really should not anticipate powerful any substantial listing acquire. However, steady money generation, superior balance sheet, decent return ratio and healthful outlook for healthcare business in the nation augur effectively for the corporation. We suggest SUBSCRIBE to the IPO from lengthy-term viewpoint.