Integrated diagnostics chain Vijaya Diagnostic Centre to raise around Rs 1,900 crore through an initial public offering (IPO). The price band for the IPO is fixed at Rs 522-531 per equity share. The offer will open on September 1 and will conclude on September 3.
The offer consists of the offer for sale with the company’s promoter S Surendranath Reddy selling 50,98,296 equity shares and investors — Karakoram and Kedaara Capital Alternative Investment Fund – Kedaara Capital AIF 1 selling 2,94,87,290 equity shares and 11,02,478 equity shares respectively.
In revenue terms, it is the largest integrated diagnostics chain in South India with 81 diagnostic centres. Around 92 per cent of the company’s income comes from individual patients. “It is the integrated model of across pathology, radiology, imaging, cardiology and others,which sets us apart,” said Suprita Reddy, Chief Executive Officer, Vijaya Diagnostic Centre. She added that these services are provided by highly qualified staff with best-in-class equipment, all at an affordable cost.
The company operates 81 diagnostic centres and has a presence in 13 cities and towns in the states of Telangana and Andhra Pradesh (AP) and in the National Capital Region and Kolkata as on June 2021.
Commenting on the expansion, Reddy said the company will focus on a ‘hub and spoke’ model for growth. For this growth, she added the company will not need external funds. In the case of expansion for the present year, she said it will require "around Rs 70 crore" and that can be raised from its existing cash flows.
The company will continue to focus on southern and western states for growth as it feels there are regions that are still under penetrated here.
While the company at present is not looking at inorganic growth, Sunil Chandra Kondapally, Executive Director of the Company said the company may look at inorganic growth, if needed. Meanwhile, commenting on the franchise model, Chandra added, “We have just one centre as franchise model. The whole strategy is to have centres owned by the company.”
The company witnessed a CAGR of 13 per cent in case of revenue from operations, from Rs 292.6 crore in FY 2019 to Rs 376.7 crore in FY 2021. In the case of adjusted EBITDA, the company witnessed a CAGR of 24 per cent from FY 2019 to FY 2021. The company had expanded their operations significantly from 61 diagnostic centres as on March 31, 2019 to 81 diagnostic centres as on June 30, 2021. This was main reason for a significant rise in their revenues, stated Narasimha Raju, Chief Financial Officer of the company.
The company’s profit for the year grew from Rs 46.27 crore for the financial year 2019 to Rs 84.91 crore for the financial year 2021.
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