Star Imaging and Path Lab
- Star Imaging and Path Lab is coming out with an initial public offering (IPO) of 48,92,000 equity shares in a price band Rs 135-142 per equity share.
- The issue will open on August 8, 2025 and will close on August 12, 2025.
- The shares will be listed on SME Platform of BSE.
- The face value of the share is Rs 10 and is priced 13.50 times of its face value on the lower side and 14.20 times on the higher side.
- Book running lead manager to the issue is Share India Capital Services.
- Compliance Officer for the issue is Shadab Khan.
Profile of the company
Star Imaging and Path Lab operates a diagnostic testing network, NABL accredited, delivering pathology, radiology, Cardiology, and Neurology services in Delhi (B2C, B2B & B2G model), Uttar Pradesh (B2G model), and Nasik (B2G Model) regions of India. The company started its journey from 1978 as proprietorship under the name of Janta X-Ray Clinic and were providing Xray and basic pathology tests using manual methods. Over the years, it has upgraded its services, equipment, and diagnostic technologies to incorporate the latest advancements in medical science, ensuring the care and improved patient outcomes. This vision led to the establishment of Star Imaging and Path Lab Private Limited in 2004, as Private Limited entity, with a vision to offer pathology, radiology, Cardiology, and Neurology services under one roof. As part of its expansion, it acquired the businesses of Janta X-Ray Clinic, M/s Star Imaging and Path Lab, and M/s Star Health Care in 2011.
The company offers a comprehensive range of diagnostic imaging services and clinical laboratory tests, including both routine and specialized studies and profiles. These services are essential for the prediction, early detection, diagnostic screening, confirmation, and monitoring of diseases. Its diagnostic imaging and radiology services encompass X-rays, computed tomography (CT) scans, magnetic resonance imaging (MRI) scans, ultrasounds, bone mineral densitometry, and mammography. In the pathology segment, its services include biochemistry, hematology, clinical pathology, histopathology, cytopathology, microbiology, serology, and immunology. It also operates a tele-radiology hub, which is equipped with a full suite of diagnostic imaging equipment and supported by a skilled team of radiologists. This centralized facility provides significant operational efficiencies and scalability, ensuring quality diagnostic services are delivered consistently across the network.
Proceed is being used for:
- Meeting working capital requirement
- Repayment/prepayment of certain borrowings availed of by the company
- Funding the capital expenditure towards purchase of Refurbished Medical Equipment in running facilities
- General corporate expenses
- Issue expense
Industry Overview
The diagnostic services sector plays a pivotal role in recommending essential treatments and monitoring the recovery of patients post-treatment. The industry experienced robust growth at a CAGR of 9-10% over FY17 and FY24 due to factors like increasing urbanisation, rising disposable income, increased test menu by players, increase in prevalence of non-communicable diseases which has led to a rise in healthcare demand. The diagnostics industry’s market size is poised to grow at a CAGR of 10-12% over FY24 and FY28 to Rs 1,275- 1,375 billion led by rising literacy rates and disposable income among the population, leading to increased awareness and demand for quality healthcare services, including diagnostics. Further, a rise in urbanisation, coupled with lifestyle-related diseases and aging population, will create a greater need for accurate and timely diagnostic services to identify and manage these health issues effectively. Chained diagnostic players are expected to grow at a faster rate than the overall industry between FY24 and FY28.
The pathology segment, estimated to have grown steadily at a CAGR of 8-9% over FY17 to FY24, is estimated to clock a CAGR of 9-11% over FY24 to FY28. This trajectory suggests an increasing demand for pathology diagnostic services, potentially driven by factors such as rising chronic disease prevalence and improved diagnostic technologies. Similarly, the radiology segment, estimated to have grown at a CAGR of 9.5-10.5% over FY17 to FY24, is expected to rise further at a CAGR of 11-13% over FY24 to FY28, indicating robust growth potential led by technological advancements and heightened demand for diagnostic imaging across medical specialties. Overall, the analysis underscores positive growth prospects for both pathology and radiology segments in the Indian diagnostic market, driven by evolving healthcare needs and technological innovation.
The Indian diagnostics industry is highly fragmented, given the high proportion of standalone centres and hospitals labs occupying a smaller share of the pie. Diagnostic chains are further split into regional and multi-regional chains, with regional chains accounting for the majority. The industry’s profitability is defined based on high volume of testing and optimal utilisation of labs. Given the low entry barriers and lack of a strong regulatory environment, the industry has many standalone players. This has made the industry highly competitive and fragmented, and hence, standalone diagnostic players are finding it hard to stay profitable. The standalone players also face problems in scaling up their operations on account of the large capital expenditure required for investment into technologies enabling complex radiology and pathology services.
Pros and strengths
Accurate diagnosis: Its diagnostic centers are equipped with advanced technology and medical equipment, such as MRI, CT scans, X-rays, and laboratory tests, that help provide accurate and timely diagnoses.
Specialized expertise: Many diagnostic centers employ medical professionals who specialize in various fields like radiology, pathology, and laboratory science, ensuring high-quality testing and interpretation.
Proper sample collection and processing procedures: Diagnostic centers have well-defined and standardized procedures for the collection, handling, and processing of samples (such as blood, urine, or tissue). These procedures ensure that samples are properly maintained, preventing contamination and ensuring the reliability and accuracy of test results.
Risks and concerns
Major revenue comes from pathology and radiology services: The company offers pathology and radiology services, which have contributed significantly to its total revenue. For the past three financial years, the revenue from these services accounted for 97.42% in FY 2025, 94.44% in FY 2024 and 93.55% in FY 2023. If it faces increased competition, pricing pressures in these two key service categories, or other adverse factors, its revenue from these services could decline in the future. Any negative developments in the sales of services within these categories could impact its overall revenue, which, in turn, may have an adverse effect on its business, operations, and financial condition. While it has not experienced a decline in revenue from these segments over the past three years and the stub period, it cannot guarantee that this trend will continue.
Geographical constrain: While the company has 24 centres across the states of Delhi, Uttar Pradesh, and Maharashtra, as of March 31, 2025, a significant portion of its operations are concentrated in Delhi and Uttar Pradesh. In the event of a regional slowdown in the economic activity in Delhi and Uttar Pradesh, or any other developments including political or civil unrest, disruption, disturbance or sustained economic downturn that reduce the demand for its services in the state of Delhi and Uttar Pradesh or any changes in the policies of the state or local governments, could adversely affect its business, results of operations, cash flows and financial condition.
Dependent on third party vendors and suppliers: The company relies heavily on third-party vendors and suppliers for the procurement of testing equipment, test kits, and reagents. Any disruption in the supply chain, whether due to financial difficulties faced by suppliers, operational challenges, labor strikes, or other unforeseen events, could have a material adverse impact on its business, operations, and financial condition. However, it has entered into long-term agreements with key suppliers and vendors to help mitigate such risks and ensure continuity of supply. The non-renewal or early termination of these agreements could also result in supply chain disruptions and negatively affect its operations.
Outlook
Star Imaging and Path Lab is a healthcare company providing diagnostic services across a wide range of medical tests. The company specializes in imaging services such as X-rays, ultrasounds, CT scans, MRIs, and laboratory tests, including blood tests, urine tests, and other specialized diagnostics. The company has proper sample collection and processing procedures. On the concern side, the company significantly depend on third party vendors and suppliers to provide it testing equipment, test kits, and reagents, and any failure in procuring such equipment or recall of existing testing equipment, test kits, and reagents could adversely affect its business, results of operations and financial condition. Moreover, 100% of its revenue from operations in Fiscal 2025 was generated from Delhi and Uttar Pradesh, and any loss of business in such region could have an adverse effect on its business, results of operations and financial condition.
The company is coming out with a maiden IPO of 48,92,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 135-142 per equity share. The aggregate size of the offer is around Rs 66.04 crore to Rs 69.47 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by Rs 471.60 lakh i.e. 5.99% to Rs 8,350.01 lakh for the financial year 2024-25 from Rs 7,878.41 lakh for the financial year 2023-24. Moreover, net profit after tax has increased by Rs 350.16 lakh i.e. 28.12% to Rs 1,595.54 lakh in the financial year ended March 31, 2025 from Rs 1,245.38 lakh in the financial year ended March 31, 2024.
The company intends to continue to expand its network of diagnostic centres and services within India and in particular increase its presence in geographies where it is currently present. It intends to grow its network across all states in India by leveraging its experience of deploying and operating diagnostic centres. The scale of its operations, presence in tier II and tier III locations, ability to offer competitive pricing to customers, accuracy of diagnostic test results and service delivery including through tele-reporting coupled with brand-building activities will allow it to grow its customer base. Going forward, the government’s share within the diagnostic industry is projected to grow on account of government-led programmes, extensive PPP models to ensure higher penetration of diagnostic facilities in underpenetrated rural India and increasing focus towards healthcare at municipal corporation level.
