Vijaya Diagnostic IPO sees tepid response on the second day of bidding

• The diagnostic lab chain sees weak response from investors on the second day of the IPO bidding as well.
• Vijaya Diagnostic IPO was subscribed 0.47 times on September 2.
• Analysts recommend subscribing to the stock for the long term relying on the company’s strong presence in south India.

Vijaya Diagnostic gets weak response from investors on the second day of its initial public offering (IPO) as well. The portion reserved for institutional investors was subscribed 0.32 times while that for retail investors was subscribed 0.74 times.

Overall, Vijaya Diagnostic’s IPO was subscribed 0.47 times. The IPO received bids for 1.81 crore equity shares as against the issue size of 2.50 crore equity shares.

The grey market premium for the IPO was also not very exciting as it indicates ₹15-₹20 premium.

Issue details
Price band	₹522 to ₹531
IPO open date	September 1
IPO close date	September 3
Allotment date	September 8
Initiation of refunds	September 9
Credit of shares to demat account	September 13
IPO listing date	September 14
Minimum lot	28

Analysts advise investors to subscribe to the IPO given the chain’s strong footing in south India. “The company is cash rich and does not require any further capital for growth,” said Ventura Securities while recommending to ‘subscribe’ to the IPO for long-term investing with a price target of ₹672, indicating an upside of 27% over the next 24 months.

The firm has ₹250 crore cash on its books, Sunil Chandra Kondapally, executive director at Vijaya Diagnostic, told Business Insider.

The company offers a “one-stop solution” for pathology and radiology testing services through its 80 diagnostic centres and 11 reference laboratories i.e. labs that perform routine and speciality tests in high volume, across 13 cities and towns in the states of Telangana and Andhra Pradesh. The company claims it has a 7% market share in the two states with an estimated market size of ₹5,100 crore.

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