Krsnaa Diagnostics Limited has issued a notice of postal ballot to seek shareholder approval for a preferential issue of warrants convertible into equity shares. The company aims to raise up to ₹91.75 crore by issuing up to 16.21 lakh warrants to its promoter and promoter group at a price of ₹566 per warrant.

The specific allottees have been identified as Mr. Rajendra Mutha and Krsnaa Diagnostics (Mumbai) Private Limited. Mr. Rajendra Mutha is allotted 75,000 warrants worth ₹4.25 crore, while Krsnaa Diagnostics (Mumbai) Private Limited receives 15.46 lakh warrants worth ₹87.50 crore. This transaction falls under Section 62(1)(c) read with Section 42 of the Companies Act, 2013 and Chapter V of the SEBI (ICDR) Regulations, 2018.

The company published advertisements in Financial Express (English) and Loksatta (Marathi) on August 19, 2026, to inform members about the special resolution. The e-voting period for the resolution commences at 9:00 am on August 19, 2026, and concludes at 5:00 pm on September 17, 2026. Shareholders holding securities as on the cut-off date of August 14, 2026, are eligible to vote via the National Securities Depository Limited (NSDL) platform. Mr. Dinesh Birla, a practicing company secretary, has been appointed as the scrutinizer for the process.

Issue Structure and Pricing

The warrants will be issued in dematerialized form and carry an entitlement to subscribe to one fully paid-up equity share of face value ₹5 each upon exercise. The exercise price is fixed at ₹566 per equity share, which includes a premium of ₹561. This pricing aligns with Regulation 164 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, based on the volume-weighted average price (VWAP) of the preceding 90 trading days.

Payment terms require the allottees to pay 25% of the issue price (₹22.94 crore) at the time of subscription and allotment. The remaining 75% (₹68.81 crore) is payable upon exercise of the warrants. If the warrants are not exercised within 18 months from the date of allotment, they will lapse, and the subscription amount paid will be forfeited by the company.

Utilization of Proceeds

The company has outlined specific objects for the utilization of funds raised through this preferential issue:

• Capital Expenditure: An amount of ₹68.81 crore is allocated for purchasing and installing diagnostic equipment, including CT scanners, MRI machines, and PET CTs. This expenditure supports both existing operations and upcoming projects.
• Acquisitions: Approximately ₹22.94 crore is earmarked for funding business acquisitions as identified and evaluated by management, subject to board approval.

Since the total issue size does not exceed ₹100 crore, the appointment of a monitoring agency under Regulation 162A of the SEBI ICDR Regulations is not required.

Impact on Shareholding Pattern

The proposed allotment will increase the aggregate shareholding of the promoter and promoter group from 27.11% to 30.58% on a fully diluted basis, assuming full exercise of the warrants.

Prior to the issue, Mr. Rajendra Mutha held 24.75% and Krsnaa Diagnostics (Mumbai) Private Limited held 2.36%. Post-allotment, assuming full subscription, their holdings will stand at 23.79% and 6.78% respectively. This transaction does not result in a change in control or management of the company. Furthermore, the increase in promoter holding falls within the limits permitted under Regulation 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, thereby exempting the company from making an open offer.

The allotment is expected to be completed within 15 days of passing the special resolution, subject to regulatory approvals. The warrants and resultant equity shares will be subject to lock-in periods as per Regulation 167 of the SEBI ICDR Regulations.

Krsnaa Diagnostics reported a decline in consolidated net profit for the first quarter of FY27 (quarter ended June 30, 2026), posting ₹166 million compared to ₹205 million in the corresponding period last year. Despite the dip in bottom-line figures, the company saw significant growth in its top line, with revenue rising to ₹2.35 billion from ₹1.9 billion year-on-year.

The company published these unaudited standalone and consolidated financial results on August 15, 2026. The newspaper advertisements were placed in Financial Express and Loksatta, pursuant to Regulation 47 read with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The earnings call transcript was subsequently disclosed under Regulation 30 on August 19, 2026.

The divergence between revenue growth and profit contraction highlights a squeeze on operating margins. While EBITDA increased to ₹588 million from ₹513 million in the prior year, the EBITDA margin narrowed to 25% from 27%. This suggests that costs rose at a faster pace than revenues during the period, largely due to upfront infrastructure investments.

Financial Highlights

Operational Drivers and Margin Pressure

Management attributed the margin compression to the front-loaded nature of its infrastructure-led model. Approximately 4,000 personnel were onboarded for the Rajasthan project, including logistics staff for collection centers, ahead of full revenue realization. These fixed costs, including laboratory equipment and manpower, were incurred from day one while operating below mature utilization levels.

Excluding these new projects, the like-to-like business delivered stable margins broadly in line with previous quarters. Rajasthan contributed ₹26 crore in revenue during the quarter. Management expects this to grow significantly, with annualized guidance ranging between ₹100 crore and ₹150 crore for FY27, potentially reaching ₹175 crore as operations stabilize. The state now has 31 mother labs, 62 hub labs, and 1,228 collection centers operational.

Retail Business Growth

The retail segment emerged as a key growth engine, with revenue jumping 64% year-on-year to ₹193 million (₹19.3 crore), contributing approximately 9% of total group revenue. The network has expanded to over 4,000 touchpoints across seven states. While currently operating at a negative EBITDA due to ground fleet deployment costs, management expects the retail business to turn EBITDA positive by Q2FY27. The company aims for retail to contribute 10% to 15% of total revenue by the end of FY27.

Strategic Developments

Krsnaa Diagnostics secured a new contract for 34 CT scan centers across Himachal Pradesh, expanding its footprint from 12 centers established nearly 12 years ago. This project is predominantly cash-paying and provides revenue visibility for the next decade. Additionally, eight MRI centers in Maharashtra were inaugurated and operationalized during the quarter, with the remaining centers in the pipeline expected to go live by end-Q3.

The company also added 12 new NABH accreditations, bringing the total count of NABL, CAP, and ACR accreditations to 124. A strategic partnership with Apulki Hospital in Pune commenced operations, granting Krsnaa exclusive diagnostic rights for radiology and pathology, including super-specialty segments.

What the Numbers Show

The data reveals a clear decoupling between revenue expansion and profitability in the short term. Revenue grew by approximately 22%, significantly outpacing the 13.1% growth in EBITDA. This gap resulted in a margin compression of nearly 200 basis points. The net profit decline of 19% underscores that operational gains were not sufficient to offset the higher cost base driven by the Rajasthan rollout. However, the rapid growth in retail revenue (64%) and the establishment of large-scale infrastructure suggest that the current margin drag is temporary and linked to capacity building rather than structural pricing pressure.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE08LI01020/25c44263-0806-43d7-b17d-33ff393f11f2.pdf