The Issue: The Initial Public Offering comprises of an offer for sale of up to 35,688,064 equity shares by the selling shareholders. The issue will have price band of Rs 522 to Rs 531 per equity share of face value of Re. 1 each
Largest integrated diagnostic player: The Company is the largest integrated diagnostic chain that combines pathology with radiology services in southern India, by operating revenue. It is also one of the fastest-growing diagnostic chains by revenue for fiscal year 2020 (Source: CRISIL Report).
Comprehensive service offerings: The Company offers a comprehensive range of 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, as of June 30, 2021.
Extensive operational network: The Company has built an extensive operational network consisting of 81 diagnostic centres and 11 co-located reference laboratories, across 13 cities and towns in the states of Telangana and Andhra Pradesh and in National Capital Region and Kolkata, as of June 30, 2021
Growth Strategy:
· Deepen penetration & Expand Customer base: To deepen its penetration and increase customer base to consolidate leading position in its core market, the plan includes –
o Expanding service network by opening additional diagnostic centres;
o Enhancing its laboratory capacity and test menu by adding latest technologies;
o Increasing its business from individual customers by offering a portfolio of additional services;
o Physician engagement through medical awareness initiatives and meetings with medical practitioners; and
o Increased focus on preventive and wellness offerings.
Expanding network: The Company shall continue its focus on expanding its network through setting up spokes and hub centres in existing catchment, adding reference laboratories and increase its home collection services in core geographies.
Focus on customer centric service offerings: Company intends to offer additional preventive and wellness services, adopt new cutting age diagnostic testing technology, and create customized packages to its customers
Expansion Plan: The plans to expand its presence in identified key cities and towns in adjacent geographies of Telangana and Andhra Pradesh and in east India specifically Kolkata
Selective Acquisition: The Company plans to supplement its organic growth with selective acquisitions of/ strategic partnerships with brands with strong vintage and market position in adjacent markets
High Brand Recall: Company has high brand recall driving high individual consumer business share and customer stickiness. Company’s focus on the consumer and, together its brand’s recognition for quality diagnostic services, results in higher brand recall in its core geographies and enable us to have a high share of walk-in customers.
Strong Technical Capabilities: Company has strong technical capabilities, quality infrastructure and state of the art medical technology with strong IT infrastructure.
· Diagnostic centre operations are supported by front-end centralized information technology platform.
· As of June 30, 2021, company’s radiology testing operations are supported by radiology equipment including 15 CT machines, 18 MRI machines and five PET CT/Gamma machines, and a team of 105 radiologists across diagnostic centres
Strong Industry growth outlook: According to the CRISIL Report, the Indian diagnostics market is projected to grow at CAGR of around 12% to 13 percent to reach approximately Rs. 920 billion to Rs. 980 billion by fiscal year 2023 from Rs. 710 billion to Rs. 730 billion in the fiscal year 2021
· The diagnostics market in Telangana and Andhra Pradesh, the states in which company has a significant presence, is projected to grow to approximately Rs. 120 billion currently to Rs. 130 billion by fiscal year 2023.
· Key drivers of Indian diagnostics market includes (i) driven by rise in health awareness and disposable incomes, (ii) increase in demand for better healthcare facilities along with quality of care of individuals, and (iii) increase in spending on preventive and wellness.
Robust Financial performance: As on June 30, 2021, company recorded total income of Rs. 125.97 crores. For FY 2021, company’s total income was Rs. 388.59 crores.
· Company’s OPBDIT margin ranked second amongst other major diagnostics player in FY 2021
· For the fiscal year 2020, average test per customer was 2.8, operating revenue per customer was Rs. 1,214 and OPBDIT per customer was Rs. 475, which are higher as compared to listed peers as per the CRISIL Report.
· For FY 2021, Company’s RONW was 23.64% and ROCE (pre cash) was 42 percent.
