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IPO analysis: Vijaya Diagnostic Centre Ltd

Vishwajeet Bhandigare
/ Categories: IPO Analysis
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IPO analysis: Vijaya Diagnostic Centre Ltd

IPO rating: Invest for long-term 

About the issue: 

Vijaya Diagnostic Centre runs one of the largest diagnostic chains in Southern India. The company is coming out with its initial public offering (IPO) of equity shares with a face value of Re 1 per equity share. The issue size of the company is Rs 1,895.04 crore, with no fresh issue while the sale of shares are worth Rs 1,895.04 crore by existing investors, according to its red herring prospectus. The price band of the issue has been fixed at Rs 522 to Rs 531 per equity share. The IPO opening date is September 1, 2021, while it will close on September 3, 2021. It will be listed on the Exchanges on September 14, 2021. The IPO market lot size is 28 shares. A retail-individual investor can apply up to a maximum of 13 lots (364 shares or Rs 1,93,284). The net proceeds generated from the IPO will be utilised to achieve the benefits of share listing on the stock exchanges and to make an offer for sale (OFS) of 3,56,88,064 shares. 

Vijaya Diagnostic IPO details: 

IPO opening date 

Sep 1, 2021 

IPO closing date 

Sep 3, 2021 

Issue type 

Book built issue IPO 

Face value 

Rs 1 per equity share 

IPO price 

Rs 522 to Rs 531 per equity share 

Market lot 


Min. order quantity 


Listing at 


Issue size 

3,56,88,064 equity shares of Re 1
(aggregating up to Rs 1,895.04 crore) 

Offer for sale 

3,56,88,064 equity shares of Re 1
(aggregating up to Rs 1,895.04 crore) 

Employee discount 

Rs 52 


About the company: 

Vijaya Diagnostic Centre was formed in 1981 and is one of the fastest-growing diagnostic chains in Southern India. The company offers a one-stop solution for pathology and radiology testing services. It also offers around 740 routine tests, 870 specialised pathology tests, 220 basic tests, and 320 advanced radiology tests. The company also offers a broad spectrum of customised health & wellness packages to its customers. 

The company's operational network consists of 80 diagnostic centres and 11 reference laboratories spread across 13 cities and towns in the states of Telangana, Andhra Pradesh, National Capital Region, and Kolkata. Almost 96.2 per cent of the revenue comes from Hyderabad while the rest are from Telangana and Andhra Pradesh region. During the year ended March 31, 2021, the company conducted approximately 6.20 million pathology tests and 0.89 million radiology tests for approximately 2.63 million customers. 

As of March 31, 2021, all Vijaya Diagnostic laboratories held National Accreditation Board for Testing & Calibration Laboratories (NABL) accreditations while three diagnostic centers held Patient Safety & Quality of Care (NABH) accreditations. 

Competitive strengths: 

  • Largest and fastest-growing diagnostic chain in Southern India.

    Affordable, one-stop solution diagnostics service provider with a focus on superior quality.

    Strong technical capabilities, cutting-edge diagnostic testing technology and robust IT infrastructure.

    All laboratories hold National Accreditation.

    High brand recalls driving high individual consumer business.

  • Company financials: 

The company’s EBITDA grew with a CAGR of 31.01 per cent from FY19 to FY21. The profit after-tax too saw huge growth with a CAGR of 35.45 per cent from FY19 to FY21. 






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The company holds a dominant position in Southern India as it is the largest diagnostic chain in the region and also, one of the fastest-growing companies. It has a strong brand recall due to its focus on an individual customer base. Since it provides an integrated one-stop diagnostic solution at reasonable prices with superior quality standards, it has built a strong value for individual customers. Various value-added services such as the home collection of specimens, house calls, and various delivery modes (reports via mail/SMS), etc have helped retain the consumers. The individual consumer business contributed to 92.09 per cent of operating revenues for FY21. The company is experiencing economies of scale through its ‘hub-and-spoke’ model, where specimens are collected from multiple locations within a catchment area for delivery to its reference laboratories for diagnostic testing.  

The key growth drivers for revenue are the number of pathology & radiology tests done as well as the number of consumer visits. During FY21, 70.9 lakh tests were done, and 26.3 lakh customers visited the centres as against 79.1 lakh tests and 27.9 lakh customer visits in FY20. The COVID-19 did affect the business in many ways. Even though the company provided RT-PCR tests for COVID detection at 25 centres, it took preference over other tests. Also, customer visits were reduced due to the lockdown. Still, the company showed resilience and has posted robust financial results. With the further unlocking, increased health awareness, and the increased spending on prevention & wellness along with the rise in demand for better healthcare facilities, the company has a way to go.  

According to CRISIL report, the Indian diagnostic industry was valued at approximately Rs 71,000 crore to Rs 73,000 crore and is projected to grow at 12 per cent to 13 per cent CAGR, which provides huge growth scope for the company. The management expects to explore this huge market through its extensive network and reputation as well as by strengthening operations in core geographies of Telangana & Andhra Pradesh markets. By virtue of the above factors, we recommend investing in the company for the long term. 

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