Vijaya Diagnostic IPO (Initial Public Offering) is going to open for subscription on 1st September 2021 and it will remain open for bidding till 3rd September 2021. Rs1,895.04 crore public issue is 100 per cent Offer for Sale (OFS) in nature and promoters' of the company have fixed issue price at Rs522 to Rs531. However, before the subscription opening, grey market has started signaling about the public issue. According to market observers, Vijaya Diagnostic IPO GMP (grey market premium) today is Rs18. They said that 100 per cent OFS and higher valuation has not gone down well in grey market.

Vijaya Diagnostic IPO GMP

As mentioned above, shares of Vijaya Diagnostic are available in the grey market at Rs18 premium, which is almost half the Vijaya Diagnostic IPO grey market premium on Thursday. On Thursday, Vijaya Diagnostic IPO GMP was Rs40 while on Friday it came down to Rs35 to Rs40. In fact on Friday evening, shares of Vijaya Diagnostic were available at Rs25 premium in the grey market. So, Vijaya Diagnostics IPO GMP has been sliding after it became available for trade in the grey market. According to market observers, 100 per cent OFS and higher valuation of the public issue has not gone down well in the grey market and it is working as 'turned down' sentiment for the public issue.

What this GMP mean

Market observers went on to add that Vijaya Diagnostic IPO GMP is Rs18, which means the grey market is expecting Vijaya Diagnostic IPO listing at around Rs549 ( Rs531 Rs18). Since, the Vijaya Diagnostic IPO subscription is yet to open, such slide in GMP is like 'turned down' sentiment by the grey market. However, they said that financials of the company is equally important and if the public issue manages to get strong bidding, then we can expect some rise in the interest of grey market in regard to this public issue.

Highlighting the strong financials of the company; Abhay Doshi, founder at UnlistedArena.com said, "Vijaya Diagnostic Center is a prominent diagnostic chain in South India. Over 90 per cent of its revenue is derived from walk-in customers which helps them in cost cutting and improving operational metrics. The company has performed well over the years, which is reflected in top & bottom line growth. Net profit margin stood at 18.4 per cent and ROCE stood at 30.9 per cent for FY 2020, which is commendable."

However, Abhay Doshi went on to add that the upper band of Rs531, the asking P/E comes at around 64x which seems to be on higher side, also the issue is purely OFS and recent fiasco in primary markets have tumbled the sentiments of investors so it would be keen to watch for the subscription rush.