About the Company:
Vijaya Diagnostic Centre Ltd is the largest integrated diagnostic chain in southern India, by operating revenue, and also one of the fastest-growing diagnostic chain by revenue for fiscal year 2020.
Company offers an one-stop solution for pathology and radiology testing services to our customers through extensive operational network, which consists of 80 diagnostic centres and 11 reference laboratories across 13 cities and towns in the states of Telangana and Andhra Pradesh and in the NCR Region and Kolkata.
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.
During the fiscal year 2021, company derived 96.2% of the revenue from operations from our core geographies, Hyderabad and rest of Telangana and Andhra Pradesh.
Company operates on a Hub and Spoke Model:
Company has implemented a ‘hub and spoke’ model, whereby specimens are collected across multiple locations within a catchment area or a region for delivery to our reference laboratories for diagnostic testing. This model provides greater economies of scale and enhances consistency of the testing procedures and results.
All of company’s centres offer integrated diagnostics services (pathology and radiology tests under one roof) with smaller spokes offering pathology tests and basic radiology tests and hub centres (ARCs) offering pathology tests, basic radiology tests and advanced radiology tests such as MRI, HRCT, SPECT and PET CT.
Company’s operational network consists of diagnostic centre network of:
(i) a flagship centre located in Hyderabad, which is company’s main ‘hub’ and equipped to conduct all of pathology specimens collection, basic and advanced
radiology tests.
(ii) 19 hub centres, which are equipped to conduct all of pathology specimens collection, basic radiology tests and certain advanced radiology tests.
(iii) 60 diagnostic centres, which are equipped to conduct a majority of pathology specimen collection and certain basic radiology tests.
Company’s Flagship Centre at Hyderabad.
Company’s flagship centre was established in 2005, and is currently located in an approximately 95,000 square feet built-up facility in Himayatnagar, Hyderabad.
It acts as the main ‘hub’ for the rest of the hub centres and diagnostic centres, and is equipped to conduct all of pathology specimens collection/tests and basic and advanced radiology tests offered by the company.
It houses the most advanced radiology equipment within the network for X-rays, ultrasounds and color doppler, digital mammography, bone density scans, PET-CT scans, MRI, multi slice CT scans.
Number of company’s centres by cities and/or regions.
Company’s revenue from operations by cities and/or regions. (in millions)
Company’s Employees:
Company’s diagnostic services are provided by a medical professional team consisting of 71 laboratory doctors, 19 physicians, 106 radiologists and 1,038 well-trained technical staff in company’s operational network, as of March 31, 2021.
Company’s Founders and Shareholders:
Vijaya Diagnostic Centre Ltd was founded and promoted by Dr. S. Surendranath Reddy, who is a first generation entrepreneur and has more than four decades of experience in integrated diagnostics business and is a radiologist.
Company’s CEO, Sura Suprita Reddy, and executive director, Sunil Chandra Kondapally, have been involved in the business and operations since 2003 and 2002, respectively.
Company’s shareholders include Promoter, Dr. S. Surendranath Reddy, and marquee investors, Karakoram Limited and Kedaara Capital Alternative Investment Fund.
Company’s Operational Metrics:
During the year ended March 31, 2021, company’s conducted approximately 6.20 million pathology tests and 0.89 million radiology tests for approximately 2.63 million customers.
Company’s tests per customer visit was 2.8, and the operating revenue per customer was Rs.1214 and operating revenue per test was Rs.428 for the fiscal year 2020, all of which are higher as compared to other listed regional peers.
Company’s Diagnostic Centres.
Competitors in the Business:
Competitors include Thyrocare Technologies , Dr Lal PathLabs , SRL, Metropolis, Apollo Diagnostics, Medall Healthcare, Suraksha Diagnostics, Suburban Diagnostics, Aarthi Scans, Krsnaa Diagnostics etc
Key Financial metrics of Industry Players.
Management Team:
- Dr. S. Surendranath Reddy (Designation: Executive Chairman)
- Mrs. S Geeta Reddy (Designation: Non-Executive Director)
Objectives of the Issue:
Offer for Sale: (Rs.1895 cr)
- Company will not directly receive any proceeds from the Offer (the “Offer Proceeds”) and all the Offer Proceeds will be received by the Selling Shareholders.
Positives for the Company:
Largest and Fastest Growing Diagnostic Chain with Dominant Position in South India.
- Company is the largest integrated diagnostic chain in southern India, by operating revenue, and also one of the fastest-growing diagnostic chain by revenue for fiscal year 2020.
- Over the years company has built an extensive operational network consisting of 80 diagnostic centres including a flagship centre located at Hyderabad, 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.
- For the fiscal year 2021, company derived 86.21% and 9.99% of the revenue from operations from Telangana and Andhra Pradesh, respectively.
Integrated Diagnostics Provider that Offers One-Stop Solution at Affordable Price.
- Company offers a comprehensive range of approximately 1,610 pathology tests, which are organized into approximately 740 routine tests and 870 specialized tests, as well as approximately 220 basic and 320 advanced radiology tests that cover a range of specialties and disciplines, as of March 31, 2021.
Plans to Expand in Adjacent Geographies and East India.
- Company has plans to expand the presence in east India, in particular Kolkata and believes that the growing demand presents company with an opportunity to establish a network of diagnostic centres in east India.
- Company intends to replicate the “hub and spokes” model while expanding into east India. In 2014, company had acquired a majority stake in Medinova , a diagnostic service provider which currently has an established hub in Kolkata, and successfully integrated it into company’s operational network.
- Medinova has contributed 3.38% of company’s revenue from operations for the fiscal year 2021.
- Company plans to set up additional diagnostic centres in this region. Given the expected increase in demand for diagnostic services in East India, company expects Kolkata to be one of the focus areas of company’s medium to long term growth.
Consumers are shifting from standalone centres to Organized diagnostics chains.
- The diagnostics industry has witnessed a shift from standalone centres to diagnostics chains due to increasing trend of patients’ reliance on organized diagnostic providers for quality services and unavailability of complex tests with standalone centres, not only on an overall country level but also at the regional markets level
Huge growth opportunities in Indian diagnostics market.
- The Indian diagnostics market was valued at approximately Rs.710 billion to Rs.730 billion in the fiscal year 2021, and is projected to grow at CAGR of around 12% to 13% to reach approximately Rs.920 billion to Rs.980 billion by fiscal year 2023.
- The growth is driven by rise in health awareness and disposable incomes, increase in demand for better healthcare facilities and quality of care of individuals, and increase in spending on preventive and wellness.
Financials of the Company:
| (in Crores) | FY 19 | FY 20 | FY 21 |
|---|---|---|---|
| Revenue | 302.94 | 354.18 | 388.5 |
| Net Profit | 46.2 | 62.5 | 84.9 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Vijaya Diagnostic Centre Ltd | 1 | 8.26 | 64.28 | 23.64% | 35.23 |
| Dr. Lal Path Labs Ltd | 10 | 35.33 | 79.39 | 23.42% | 149.38 |
| Metropolis Healthcare Ltd | 2 | 35.97 | 69.89 | 25.91% | 138.23 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 1st September 2021 |
| Issue Closes on:. | 3rd September 2021 |
| Issue Price | Rs.522- 531 |
| Face Value | Rs. 1 |
| Retail Category Allocation | 35% |
| Minimum Lot | 28 shares |
| Minimum Investment | Rs. 14,868 |
| Issue Constitutes | 34.99% |
| Issue Size | Rs. 1895 cr ($ 256 million) |
| Market Cap | Rs. 5414 cr ($ 731 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 3,56,88,064 |
| Equity Shares Prior to the Issue | 10,19,65,926 |
| Equity Shares after the issue | 10,19,65,926 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 8th September 2021 |
| Initiation of Refunds | on or Before 9th September 2021 |
| Credit of Equity Shares: | on or Before 13th September 2021 |
| Listing Date: | on or Before 14th September 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 71,07,613 | 0.23 | 0.32 | 13.07 |
| NII | 53,30,710 | 0.01 | 0.05 | 1.32 |
| Retail | 1,24,38,323 | 0.46 | 0.74 | 1.09 |
| Employee | 1,50,000 | 0.24 | 0.52 | 0.98 |
| TOTAL | 2,50,26,646 | 0.30 | 0.47 | 4.54 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 8.26 | 64.28 | 23.64% | 35.23 |
| Check IPO Allotment Status: |
|---|
KfinTech Website: http://kfintech/IPO/Allotment_StatusBSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Vijaya Diagnostic Centre Ltd 3-6-16 & 17, Street No. 19, Himayatnagar, Hyderabad, 500 029, Telangana, India; Tel: +91 40 2342 0411 E-mail: ir@vijayadiagnostic.in Website: www.vijayadiagnostic.com |
| IPO Registrar Info: |
|---|
| KFin Technologies Private Limited Selenium, Tower B, Plot No- 31 and 32, Financial District, Nanakramguda, Serilingampally, Hyderabad, Rangareedi 500 032, Telangana, India Tel: +91 40 6716 2222/ 1800 309 4001 E-mail: vijaya.ipo@kfintech.com Website: www.kfintech.com |
