Vijaya Diagnostics IPO opens tomorrow grey market premium weak should you subscribe

Opportunity to invest in Vijaya Diagnostics will open tomorrow, shares weakening in gray market, know expert’s opinion about investment

Before the opening of the IPO, the company’s shares are trading in the gray market at a premium of Rs 30 per share.

Vijaya Diagnostics IPO: Tomorrow on September 1, the IPO of Vijaya Diagnostics with Amy Organics will also open for subscription. No new shares will be issued under this IPO of Rs 1894 crore and 3.56 crore shares will be issued under Offer for Sale (OFS). Before the opening of the IPO, the company’s shares are trading in the gray market at a premium of Rs 30 per share. According to the information, under OFS, Dr S Surendranath Reddy will sell 50.98 lakh shares, Karakoram Limited 2.94 crore equity shares and Kedara Capital Alternative Investment Fund-Kedara Capital AIF1 will sell maximum 11.02 lakh shares. 1.5 lakh equity shares are reserved for employees.

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Issue related details

  • Under this IPO of Rs 1895.04 crore, the price band for shares with face value of Re 1 has been kept at Rs 522-531 per share. The employees of the company will get a discount of Rs 52 per share.
  • The lot size for the issue has been kept for 28 shares i.e. investors will have to invest at least Rs 14868 according to the upper price of the price band.
  • The allotment of shares of this IPO can be final on 8th September and its shares can be listed in the market on 14th September.
  • About 50 per cent of the IPO is reserved for QIBs (Qualified Institutional Buyers), 15 per cent for non-institutional investors and 35 per cent for investors.

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This is the opinion of experts regarding IPO subscription

  • Vijaya Diagnostic Center is the largest integrated diagnostic chain in South India in terms of operating revenue and the fastest growing diagnostic chain in terms of revenue for the financial year 2019-20 as per CRISIL report.
  • According to analysts at Marwari Shares and Finance Limited, taking the EPS (earnings per share) of Rs 8.26 for FY21 as basis, the company may get listed at a P/E of 64.26 with a market cap of Rs 54144 crore while Pierce Dr Lal Patholabs P /E is trading at 80.66 and Metropolis Healthcare is trading at a P/E of 56.55. According to analysts, the company is showing a strong position in growth in the Indian diagnostics industry, due to which the brokerage firm has given it a subscribed rating.
  • On the other hand, Yash Gupta, Equity Research Analyst, Angel Broking, believes that the price of this IPO is at the upper level of the recently listed diagnostic companies. According to Gupta, the IPO price is 64 times the company’s earnings (price to earnings) in FY21. Due to this, Angel Broking is neutral on this issue.
  • Kotak Securities has taken the risk of investing in the company due to lack of skilled workforce, high cost of technical advancement, stiff competition and presence in South India. The brokerage firm has not given any rating to this issue.
    (Article: Kshitij Bhargava)
    (The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)

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