Krsnaa Diagnostics Limited IPO

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(i) It is a large and differentiated diagnostic service provider. It 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 centres pan-India.

(ii) It also 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 and 365 days a year. It mainly focus on the public-private partnership (“PPP”) diagnostics segment and has the largest presence in the diagnostic PPP segment. It has deployed 1,781 diagnostic centres pursuant to PPP agreements with public health agencies. It operates 1,801 diagnostic centres offering radiology and pathology services in 13 states across India

(iii) It offers a range of diagnostics imaging services and clinical laboratory tests that include both routine and specialized tests/studies and profiles, which are used for prediction, early detection, diagnostic screening, confirmation and/or monitoring of diseases.
In 2020 it had a team of 121 radiologists, 33 pathologists, 7 microbiologists and more than 2,300 qualified professionals including clinicians, technicians and operators.

(iv) It continues to make investments in equipment and in our technology platform, to ensure they meet requisite industry standards and accreditations like NABL and NABH. Its diagnostic equipment is procured from leading OEMs including Wipro GE Healthcare Private Limited, Siemens Healthcare Private Limited, Fujifilm India Private Limited, HORIBA India Private Limited and Agappe Diagnostics Limited.

Competitive Strengths
(i) Unique and scaled diagnostics company
(ii) Strong brand equity
(iii) Extensive footprint across India

Objects of the Krsnaa Diagnostics Limited IPO:

A) The Offer comprises of Fresh Issue (400 Crores) and same will be used for following purpose. (i) To establish diagnostics centres at Punjab, Karnataka, Himachal Pradesh, and Maharashtra. (ii) Repayment of borrowings (iii) General corporate purposes B) Offer of Sale (813 Crores)

Krsnaa Diagnostics Limited IPO Details:

Open Date: Aug 04 2021
Close Date: Aug 06 2021
Total Shares: 12,714,884
Face Value: ₹ 5 Per Equity Share
Issue Type: Book Building
Issue Size: 1211 Cr.
Lot Size: 15 Shares
Issue Price: ₹ 933 - 954 Per Equity Share
Listing At: NSE,BSE
Listing Date: Aug 16 2021

Promoters And Management:

Rajendra Mutha, is the Executive Chairman of the Board of Directors and Whole-time Director of the Company. He is a registered pharmacist certified by the Maharashtra State Pharmacy Council. He has been associated with the Company since incorporation and has over 10yearsof experience in the field of pharmacy and diagnostics. He is currently responsible for the overall management of the Company. Pallavi Bhatevara, is the Managing Director of the Company. She has passed the higher secondary exams from the Maharashtra State Board of Secondary and Higher Secondary Education. She has been associated with the Company since January 29, 2013, and has 8 years of experience in the field of diagnostic services. She is currently responsible for the expansion and growth of the Company and is involved in the tendering process and implementation and execution of projects. Yash Mutha, is the Whole-time Director of the Company. He holds a bachelor’s degree in commerce from the University of Pune and has been admitted to the Institute of Chartered Accountants of India as an associate member. He is also a certified fraud examiner and has been accredited by the Association of Certified Fraud Examiners, USA, and a Certified Information Systems Auditor (“CISA”) accredited by the CISA Certification Committee, USA. He has been associated with the Company since October 17, 2018. He has over 12years of experience in the field of audit and risk management. He is currently responsible for internal audits, risk reviews, and the development of business processes. Prem Pradeep, is the Non-Executive Nominee Director of the Company(nominee of Phi Capital). He holds a bachelor’s degree in mechanical engineering from the Indian Institute of Technology and a master’s degree in management from the Indian Institute of Management. He has been associated with the Company since October 8, 2020

Financials of Krsnaa Diagnostics Limited IPO:

Particulars (in Cr.) Mar-21 Mar-20 Mar-19 Mar-18
Sales 396 258 209 107
Gain on fair value movement 252
Cost of Material Consumed 83 27 17 10
Fees to hospitals and others 108 75 62 17
Loss on fair value movement of CCPS 0 177 95 89
Employee Benefits Expense 29 23 18 16
Other Expenses 81 69 53 35
Operating Profit 95 -114.20 -37.59 -61.64
OPM % 24% -44.19% -17.97% -57.30%
Other Income 12 13 5 3
Interest 25 24 19 8
Depreciation 37 32 25 17
Profit before tax 295 -158 -77 -84
Total Tax Exps. 110 -46 -19 -24
Net Profit 184 -111 -58 -60
NPM % 46% -43.32% -27.75% -55.93%
No. of shares 3.1 3.1 3.1 3.1
EPS in Rs 15 -35 -18 -19

Comparison With Peers:

Name of the company 3-year Revenue Growth 3-year PAT Growth EBITDA Margin (FY21) ROE  (FY21) Debt to Equity P/E 3 Years Return
Krsnaa Diagnostics Ltd 24% NA 91% 79.76% 0.87 NA NA
Metropolis Healthcare Ltd 9% 15% 29% 29.70% 0.16 79.70 NA
Dr. Lal PathLabs Ltd 10% 14% 30% 25.13% 0.00 75.15 56.12%

Recommendation on Krsnaa Diagnostics Limited IPO:

Review and Recommendation of Krsnaa Diagnostic IPO from InvestorZone is 3/10 1. The company is continuously in loss in the last 3 years. They have an exceptional gain of 252 Crores in FY21 due to which the company has shown 184 Crores of profit else there is hardly any profit. 2. They have close to 45 Crores of Profit after excluding the one time gain, and with outstanding shares of 3.1 Crores, the EPS would be 15. 3. P/E on Issue price of 954 would be ~64x. This looks very high. 4. Asking MCAP of ~3000 Crores while Dr.Lal and Metropolis are trading at Mcap of 30000 Crores and 14000 Crores respectively. However, comparison is difficult, as Dr.Lal and Metropolis are well established brand with profitable business. 5. This IPO looks very risky. Balance sheet is very weak. In 2019, their Net-worth was completely eroded.

Lead Manager of Krsnaa Diagnostics Limited IPO:

  1. Equirus Capital Private Limited
  2. JM Financial Consultants Private Limited

Registrar of Krsnaa Diagnostics Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

S.No. 243, A-Hissa No. 6, CTS No. 4519, 4519/1, Near Chinchwad Station, Chinchwad, Taluka –Haveli, Pune -411 019 Telephone:+91 20 4695 4695

Discussion on Krsnaa Diagnostics Limited IPO:


    What is the meaning of “Loss on fair value movement of CCPS” and why it is zero in year 2020.
    is it accounting trick to show profitability?

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