The IPO (initial public offering) of Krsnaa Diagnostics, a major diagnostics company in the public-private partnership (PPP) space, will open on August 4. The offer will close on August 6. The funds from the IPO will be used to become debt free and to finance its expansion, stated the company executive.
The offer is priced at Rs 933-Rs 954 per equity share. The IPO comprises fresh issue of equity shares worth Rs 400 crore. Under offer for sale (OFS), the company’s existing shareholders are offering up to 94,16,377 shares. The selling shareholders are Phi Capital, Kitara, Somerset Indus Healthcare Fund I Ltd and Lotus Management Solutions. The company is set to raise around Rs 1,210 crore via IPO.
Around 67 per cent of Krsnaa’s revenues in fiscal 2021 are on account of various PPP tie-ups. But the company is aiming to reduce the share of PPP to 50 per cent and increase revenue from the private model to 50 per cent in times to come.
Yash Mutha, Whole-time Director of the company said, “We will be a zero-debt company after paying off our debt post the IPO. This will support our expansion in subsequent years.”
As on March 31, 2021, and June 30, 2021, the total debt of the company stood at Rs 146.31 crore and Rs 141.73 core respectively. Krsnaa will utilise around Rs 146 crore from the net proceeds towards repayment or prepayment of certain borrowings. In addition, Rs 150.81 crore will be deployed to finance the cost of establishing diagnostics centres at Punjab, Karnataka, Himachal Pradesh and Maharashtra.
Mutha said, “Punjab government wanted to start this PPP model-based diagnostic centre in the state for some time now. It finally floated the tender. As of other states, there is an interest in building their healthcare infrastructure mainly after COVID. Many states are looking at this opex model rather than a capex model. More tenders are expected in the coming months.”
Meanwhile, highlighting the challenges of the PPP model, Pallavi Bhatevara, managing director of Krsnaa Diagnostics said, “Other than geographical challenges, there is no major challenge. There is more transparency in the tender as well.” She added the use of technology has streamlined the process. The processes are becoming smoother. Adding to it, Mutha said healthcare is very sensitive and governments understand that.
There are over 1,800 centres run under the PPP model and have presence across pan India. These centres provide specialised diagnostic services including radiology, pathology and tele-radiology services. The revenues from operations of the company grew at a CAGR of 54 per cent in the last four years. The diagnostics is focussed on mass segments in tier II and tier III cities and towns in addition to metros and tier I cities.
