Krsnaa Diagnostics Ltd IPO

Current

IPO Synopsis

Krsnaa Diagnostics IPO Synopsis

One of the rapidly growing diagnostic chains in India, Krsnaa Diagnostics Ltd. is launching its Initial Public Offer in August 2021.

Krasnaa Diagnostics IPO will open on August 4th and closes on August 6th. With the total issue size of ₹1,213.33 Cr, the offer comprises of a fresh issue of shares worth ₹ 400 crore and an offer for sale of shares of 9,416,377 equity shares by existing selling shareholders. 

 

Krsnaa Diagnostics IPO Share holding

 

% Shareholding

Pre- IPO(%)

Promoters & Promoter Group

31.62

Public

68.38

Source: RHP

 

Object of the offer:

The company proposes to utilise the net proceeds from the issue - 
1. To finance the cost of establishing diagnostics centres at Punjab, Karnataka, Himachal Pradesh, and Maharashtra
2. Repayment/pre-payment of firm's borrowings fully or partially 
3. For general corporate purposes

About Krsnaa Diagnostics Ltd

Krsnaa Diagnostics Limited is one of the largest differentiated diagnostic service providers in India (Source: CRISIL Report). The company provides a range of technology-enabled diagnostic services such as imaging (including radiology), pathology/clinical laboratory and teleradiology services to public and private hospitals, medical colleges and community health centers pan-India. Krsnaa Diagnostics operates one of India’s largest teleradiology reporting hubs in Pune that is able to process large volumes of X-rays, CT scans and MRI scans round the clock, 365 days a year, and allows them to serve patients in remote locations where diagnostic facilities are limited. The Company focuses on and has the largest presence in the public-private partnership (“PPP”) diagnostics segment (Source: CRISIL Report). The company provides quality and inclusive diagnostic services at affordable rates across various segments (radiology tests are priced 45% – 60% lower than market rates while pathology tests are 40% – 80% lower than market rates (Source: CRISIL Report).

Krsnaa Diagnostics has a vast network of diagnostic centres predominantly non-metro, and lower tier cities and towns in India. With 1,801 diagnostic centres in operation, Krsnaa Diagnostics offering radiology and pathology services across 13 different cities in India. 

Key Points

Competitive Strengths of Krsnaa Diagnostics:

Some of the competitive strengths are as follows

  • Unique and scaled diagnostics company:

Krsnaa Diagnostics is one of the largest differentiated diagnostic service providers in India. The company offers imaging (including radiology), pathology/clinical laboratory services across India. It also operates one of the largest teleradiology hubs in India. In the radiology segment, the company provides X-rays, CT scans, MRI scans, ultrasounds, bone mineral densitometry, mammography amongst others. In their pathology segment, they provide a spectrum of services ranging from routine tests such as CBC or blood glucose to highly specialized investigations for infectious diseases, cancer markers, hormonal assays, and therapeutic drug as-says. . In Fiscal 2019, 2020 and 2021, the company served 3.25 million, 5.27 million, and 5.18 million patients. The Company focuses on and has the largest presence in the public private partnership (“PPP”) diagnostics segment (Source: CRISIL Report). It has been awarded 38 contracts on PPP basis as of June 30, 2021 & has 26 active collaborations in the private healthcare segment. The company’s large network of diagnostic centres, together with the quality of their services at competitive rates, have been key factors in the significant growth that they have experienced over the years.

 

  • Extensive footprint across India with robust infrastructure:

Krsnaa Diagnostics’ network of diagnostic centres spans 13 states across India and as of June 30, 2021 were present in over 1,800 locations. The company has a significant presence in each state where they operate and as part of the diagnostic centres they establish, the company has deployed and operates diagnostic centres across multiple locations within a particular state. The growth of the company’s diagnostic centres across India is primarily due to their ability to understand and analyze new markets and to their project management and execution capabilities. Krsnaa Diagnostics deploys latest equipment and technologies to ensure that their processes are efficient and scalable with minimal errors. The company’s technology platform tracks their operations and internal performance metrics, thereby enabling them to improve the operating efficiency of their business. 

  • Business model with robust revenue visibility:

The company’s operations across radiology and pathology provide them with diversified sources of revenue. The PPP segment of healthcare services is a large target market, representing a market opportunity of ₹95 billion – ₹100 billion in Fiscal 2021. Going forward, this market is expected to grow at a CAGR of between 14% and 17% between Fiscal 2021 and 2023 to reach ₹125 billion and ₹135 billion on the back of higher government spending in the PPP segment; Krsnaa Diagnostics has the largest presence in the diagnostic PPP segment (Source: CRISIL Report). Krsnaa Diagnostics’ Public Private Partnership (PPP) agreements to de-ploy diagnostic centres for their radiology and pathology services are typically long-term contracts that en-sure visibility of revenues for their operations. 

The term of the contracts with public health agencies ranges between two years and 10 years and typically include a term extension clause based on performance and mutual agreement. Further, considering the company’s services at competitive rates, public health agencies, in multiple instances, have expanded the coverage of the scope of their services to additional centres without any additional bidding process. 

The company follows a hospital partnership model of operations which ensures captive customer, synergies in various costs as well as significant volumes that ensure the cost structure is efficient. The cost-efficient operations also help Krsnaa Diagnostics to bid at competitive prices thereby allowing them to convert more bids into projects. The Company has been awarded 77.59% of all tenders (by number) that they have bid for since inception.

 

Risk Factors of Krsnaa Diagnostics:

Some of the risk factors are as follows

  • Revenue from sale of service to public health agencies was INR 2,675.70 million in FY21 and represented 67.49% of the total revenue from operations. If the company is unable to negotiate and retain similar fee arrangements, if the contracts are cancelled, or if they are unable to realize payments due to them, their business may be materially and adversely affected. 
  • Most of the diagnostic centres have been established and are operated under public private partnership contracts awarded by government agencies through a competitive bidding process. There can be no assurance that the company will qualify for, or that they will successfully compete and win such tenders in the future. 
  • Any disruption in information technology systems or the telecommunication network would have an impact on their diagnostic services and can adversely impact their reputation and business.

How to Apply for an IPO?

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  • Enter the number of lots and price at which you wish to apply for

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  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

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  • You will receive a mandate notification to block funds in your UPI app

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Frequently Asked Questions

An Initial Public Offering OR IPO is the process of issuing stock for sale for the first time by a private corporation to the public. A company can issue its stock for sale for the first time to raise money by issuing either debt or equity. In case, the company chooses the equity route, the first such offering of equity shares to the public via listing of the shares in the stock markets is called an IPO.

 

This is one of the processes that has to do with the pricing of the IPO. An IPO can be made either through book building method, the fixed price method or a combination of both.

While in book building the price at which securities will be offered/allotted is not known in advance to the investor (investor is aware of an indicative price range only), in the fixed price process price at which the securities are offered/allotted is known in advance to the investor.

When it comes to an IPO, there are 4 types of investors who can bid, as per SEBI guidelines. They are –

  1. Qualified institutional investors (QIIs)
  2. Anchor investors
  3. Retail investors and
  4. High net-worth individuals (HNIs)/Non-institutional investors (NII).

 

IPO subscription period is the period of time during which investors can promise to purchase shares of a security to be issued as initial public offering (IPO).

Check: IPO Application Process

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A Red Herring Prospectus, or offer document, is filed by a company to SEBI. This document is very useful to as it provides detailed information about the company’s business operations, financials, promoters and the company’s objective for raising funds.

Contact Details of Krsnaa Diagnostics Ltd IPO

Contact Information

Address

Krsnaa Diagnostics Limited
S.No. 243, A-Hissa No. 6, CTS No. 4519, 4519/1,
Chinchwad, Taluka – Haveli, Pune - 411 019


Phone: +91 20 4695 4695
Email: cs@krsnadiagnostics.com
Website: https://krsnaadiagnostics.com/

Krsnaa Diagnostics Ltd IPO Lead Manager

KFintech Private Limited
   KFintech, Tower-B, Plot No 31 & 32,
   Financial District, Nanakramguda, Gachibowli,
   Hyderabad, Telangana India - 500 032.

Phone: 04067162222, 04079611000
Email: krsnaa.ipo@kfintech.com
Website: https://karisma.kfintech.com/

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