Krsnaa Diagnostics makes a tepid debut: What should investors do ?

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Krsnaa Diagnostics shares made their stock market debut on Monday by listing at a 7% premium from its issue price of Rs 954 apiece.

The scrip got listed at Rs 1,025.00 apiece on the BSE, thereby registering a gain of 7.44% from its offer price of Rs 954.00. On the National Stock Exchange (NSE), it opened at Rs 1,005.55, up 5.40% from the issue price. So far, the stock has hit a high Rs 1,099.50 on BSE and Rs 1,099.70 on the NSE during its first 90 minutes of trade on the first day.

At 11:30 am, the scrip was trading at Rs 1025.00 on the both the BSE and NSE.

The Rs 1,213.33-crore IPO was subscribed as much as 64.40 times. The qualified institutional buyers segment was subscribed 49.83 times, non-institutional investors was subscribed 116.30 times and the retail investors portion saw 42.04 times subscription.

Majority of brokerages had assigned a subscribe rating to the issue. Post listing, Krsnaa Diagnostics has joined the listed industry peers such as Metropolis Healthcare and Dr. Lal Pathlabs Ltd.

What should investors do post listing ?

Vinit Bolinjkar, Head of Research, Ventura Securities

Krsnaa Diagnostics has an innovative business model in PPP partnership in 14 states that brings the experience of quality private hospital services to the masses. Though their services are priced ~30% lower than private sector peers, they enjoy unbridled access to mass clientele with negligible marketing costs. Their digital radiology model is scalable and provides significant operating leverage. With 33 new centres to be added over the next 2 years, we expect significant top line and bottom line growth. Annual price resets of 3% are also a welcome feature of their multi year contracts. Hence, long term investors can stay put.

Astha Jain, Research Analyst, Hem Securities

Recommnend investors to hold partially post listing. The company has a lot of positives to track including unique and scaled business model of company. With robust revenue visibility, the company is well positioned to capitalize on healthcare spending across public and private sectors.

Saurabh Joshi Research Analyst at Marwadi Shares and Finance Limited

We had given a subscribe rating to Krsnaa Diagnostics IPO and the listing was broadly in line with our expectations. We are recommending short term investors to book profit while long term investors are advised to remain invested as the company has one of the fastest-growing diagnostic chain businesses in India. The company has an extensive network of diagnostic centres across India with a key focus on non-metro, and lower-tier cities and towns. As of June 30, 2021, it operates 1,823 diagnostic centres (1,797 with public health agencies and 26 with private health agencies) that are offering radiology and pathology services in 13 states across India. We believe the company is well-positioned to capitalize on healthcare spending across public and private sectors.