Krsnaa Diagnostics filed draft papers with the market regulator Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The public issue comprises a fresh issue of equity shares worth Rs 400 crore and an offer-for-sale (OFS) of 94 lakh equity shares of a face value of Rs 5 per share by existing shareholders and promoters. The key stakeholders participating in the OFS are Phi Capital Trust’s Phi Capital Growth Fund-I (16 lakh equity shares), Kitara PIIN 1104 (33.40 lakh shares), Somerset Indus Healthcare Fund (44.54 lakh equity ) and Lotus Management Solutions (21,380 shares). The book running lead managers to the IPO are JM Financial, DAM Capital Advisors, Equirus Capital Private Ltd, and IIFL Securities, while the registrar to the issue is KFin Technologies Private Ltd. Equity shares are expected to be listed on BSE and NSE.
Key details of Krsnaa Diagnostics IPO
– Krsnaa Diagnostics industry listed peers are Metropolis Healthcare and Dr. Lal Pathlabs Ltd. The average industry P/E ratio is 97.18x.
– Krsnaa Diagnostics has planned to use the net proceeds towards financing the cost of establishing diagnostics centres at Punjab, Karnataka, Himachal Pradesh and Maharashtra worth Rs 150.8 crore. While Rs 125.7 crore will be used for repayment and/or pre-payment in full or in part of certain borrowings availed by the company and towards general corporate purposes.
– For the nine months ended December 31, 2020, Krsnaa Diagnostics reported a profit of Rs 195 crore, while revenue from operations stood at Rs 300 crore.
– Krsnaa Diagnostics in consultation with its book-running managers may consider a pre-IPO placement of Rs 200 crore from anchor investors, according to DRHP.
– The company has experienced heavy demand for PCR testing as a result of the COVID-19 pandemic, which has had a positive impact on its overall testing volume, the duration and level of the demand for, and reimbursement for, COVID-19 molecular testing was uncertain.
– Krsnaa Diagnostics may also experience an adverse impact on cash collections and supply chain disruptions, including shortages, delays and price increases in testing equipment and supplies, as a result of the impact of the COVID-19 pandemic.
– The diagnostic firm operated over 1,800 diagnostic centres across 13 states as of December 31, 2020. It also operates a teleradiology reporting hub in Pune. Each of its diagnostic centres and particularly the teleradiology reporting hub is critical to its operations.
– Krsnaa Diagnostics competitors include diagnostic healthcare service providers in India, hospital-based diagnostic centres, independent clinical laboratories, other smaller-scale providers of diagnostic services (with more established local and regional presence in certain geographies) such as pathology, radiology laboratories and preventive care providers as well as international service providers which may establish and expand their operations in future.
– The company depends on third-party vendors and suppliers to procure its imaging equipment, testing equipment and reagents and it enters into contractual arrangements with them.