Krsnaa Diagnostics Limited IPO Details and Review

Krsnaa Diagnostics IPO: Key Details

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Company Information

Krsnaa Diagnostics , incorporated in 2010, is one of the largest differentiated diagnostic service providers in India. They provide 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 centres pan-India.

They are the fastest-growing diagnostic chain in India on multiple parameters including operating
income, operating profit before depreciation, interest, and tax (“OPBDIT”) and profit after tax between 2017 and 2020, and volume of tests conducted between 2018 and 2021 (amongst players with
revenues exceeding ₹1,500 million).

They focus on the public-private partnership (“PPP”) diagnostics segment and have the largest presence in the diagnostic PPP segment. They have an extensive network of integrated diagnostic centres across India primarily in non-metro and lower tier cities and towns. As of June 30, 2021, they operated 1,823 diagnostic centres offering radiology and pathology services in 13 states across India.

Competitive Strengths

• Unique and scaled diagnostics company;
• Strong brand equity;
• Extensive footprint across India with robust infrastructure;
• Business model with robust revenue visibility; and
• Well positioned to capitalize on healthcare spending across public and private sectors.

Company Strategy

• Continue to expand presence across India
• Expand offering of diagnostic services with a focus on specialized diagnostics
• Grow the digital footprint
• Maintain high social impact
• Continue to improve profitability and efficiency
• Expand business and geographical footprint through opportunistic acquisitions

Proceeds from Krsnaa Diagnostics IPO will be used to:

• Proposing to finance the cost of establishing diagnostics centres at Punjab, Karnataka, Himachal Pradesh and Maharashtra.
• Repayment/pre-payment, in full or part, of borrowings from banks and other lenders availed by the Company; and
• General corporate purposes

Krsnaa Diagnostics IPO: Financials

Krsnaa Diagnostics IPO: Comparison with listed industry peers

Krsnaa Diagnostics IPO: Risks

• A substantial portion of the revenue from operations depend on payments under contracts with public
  health agencies
• Most of the diagnostic centres have been established and are operated under public-private partnership
  contracts awarded by government agencies
• Business interruption at the diagnostic centres and tele-radiology reporting hub could result in
  significant losses
• The prices that they can charge for diagnostic services are dependent on recommended or mandatory
  fees fixed under the terms of the agreements entered into with public and private healthcare providers

For complete internal and external risk factors, you can refer to the RHP of the company.

Krsnaa Diagnostics IPO: Registrar and Lead Managers