Vijay Diagnostics IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Vijay Diagnostic Center IPO-Established in 1981, Vijaya Diagnostic Centre is one of the fastest-growing diagnostic chains in Southern India

Business — The company offers a one-stop solution for pathology and radiology testing services. The company offers around 740 routine tests, 870 specialized pathology tests, 220 basic tests, and 320 advanced radiology tests. The company also offers a broad spectrum of customized health and wellness packages to its customers.

Region of operation — Company’s operational network consists of 80 diagnostic centers and 11 reference laboratories spread across 13 cities and towns in the states of Telangana, Andhra Pradesh, National Capital Region, and Kolkata. 96.2% of the revenue comes from Hyderabad, the rest of Telangana, and the Andhra Pradesh region.

Offer purpose —

The IPO is entirely an offer for sale to provide partial exit to existing investors, who will be divesting 30 per cent of the stake

while the promoter is divesting 5 per cent.

Risks —

Company is in a highly competitive space

High regional concentration risk

Company not getting any proceeds from IPO for growth

Strength —

Largest and fastest-growing diagnostic chain in Southern India.
Affordable diagnostics service provider with a focus on superior quality.
Strong technical capabilities, cutting-edge diagnostic testing technology and robust IT infrastructure.
High brand recalls driving high individual consumer business.

Future

Company is operating with non-franchise model so growth is based on company reach. Focus is more on quality which bring people back to same place. Although the industry is highly competitive, but regional it has strong presence.

Valuations

Valuations are slightly lower considering peers but look reasonable

If we see growth projections, then valuations are at par or premium only

Should we apply?

We can completely avoid

Wait for lower prices to emerge to invest

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