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Krsnaa Diagnostics, the leading diagnostic chain, is set to go public on Monday. Krsnaa Diagnostics shares will be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on August 16 at 10:00 AM. The company’s initial public offering of Rs 1,213.33 crore saw a great response from the investors. The Krsnaa Diagnostics IPO was entered 64.40 times. According to market analysts, Krsnaa Diagnostics stock is likely to be quoted at a price of more than Rs 1,250 per share, more than a 30 percent premium to the final issue price of Rs 954 per share.
Strong investor demand and positive market stance are expected to translate into a healthy share price for Krsnaa Diagnostics. Krsnaa Diagnostics shares are quoted at a premium of approximately 30 percent to the issue price, said Astha Jain, senior research analyst at Hem Securities.
The IPO of Krsnaa Diagnostics received bids of more than 45.80 crore shares against the total issue size of more than 71.12 lakh shares, data available from the National Stock Exchange (NSE) showed. The section reserved for qualified institutional buyers (QIBs) was subscribed 49.83 times. The quota reserved for non-institutional investors was subscribed 116.30 times and that of private retail investors (RIIs) was subscribed 42.04 times.
Prior to listing, Krsnaa Diagnostics’ stock was priced at 1,259-1,274 per share in the unofficial market. The gray market premium was Rs 305-320, about 32-33.5 percent higher than the final issue price of Rs 954, according to the IPO Watch and IPO Central data. Strong investor support and a decent gray market premium signaled a healthy share price for Krsnaa Diagnostics. krsnna
“Krsnaa is a large and differentiated diagnostic services provider, providing a range of technological diagnostic services such as imaging, pathology and teleradiology services to public and private hospitals, medical colleges and community health centers across India. The company focuses on the public-private partnership (PPP) diagnostics segment and has the largest presence in the diagnostic PPP segment. About 70 percent of the company’s revenue comes from public health agencies i.e. from the government, and these are long-term contracts ranging from 2 years to 10 years, thus showing good visibility of the revenue,” said Ashish Chaturmohta, director of research, Sanctum Wealth Management .
“The company uses the proceeds from Fresh Issues in good areas such as loan repayment and Capex. After the IPO proceeds, the company’s DE ratio will be 0.37. The promoter’s share was already low and after the IPO it will drop further to just 27.38%. Based on Peer comparison problem is aggressively priced. After the PPE of 151 cr capex companies would be about 450 cr and based on ATR of FY20 i.e. 1.04, the company has the potential to bring in about 468 cr of revenue (not Covid) and with an adjusted PAT- margin of FY20 will be PAT of about 37 cr or EPS of 11.9 based on that, the issue also appears to be aggressively priced at 80 PE,” Chaturmohta further added.
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