Krsnaa Diagnostics slips 15% as Rajasthan NHM cancels agreement

The National Health Mission, Rajasthan has cancelled the letter of acceptance (LoA) for providing laboratory services in the state under the free diagnostics initiative on the hub and spoke model.

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Shares of Krsnaa Diagnostics declined 15 per cent to Rs 452.45 in Thursday’s intra-day trade, after the National Health Mission Rajasthan cancelled the letter of acceptance (LoA) for providing laboratory services in the state under free diagnostics initiative on the hub and spoke model.

However, the company said that the cancellation of LoA does not in any way impact its existing business operations.

“We remain steadfast in our commitment to expanding our business in both existing and recently executed agreements across various geographies,” the company said.

At 12:58 pm; the stock traded 12 per cent lower at Rs 468.20, as compared to 0.26 per cent gain in the S&P BSE Sensex. With Thursday's decline, the market price of the company has corrected 26 per cent from its 52-week high level of Rs 609.15, touched on June 12, 2023.

In May 2023, the company had accepted letter of award issued by National Health Mission, Rajasthan "the authority" for providing "Laboratory Services under Free Diagnostics Initiative on HUB and SPOKE Model under NHM" in the entire state of Rajasthan to the company in consortium with the telecommunications consultants India Ltd (TCIL) (100 per cent Government of India Undertaking) as lead bidder.

"As part of tender requirements, there were requirements of provision of submitting additional performance security. There are disagreements over providing of this additional performance security due to certain technicalities," Krsnaa Diagnostics said.

The company, further, said in collaboration with TCIL, it has taken legal recourse and legal counsels are actively pursuing this matter with utmost dedication and diligence.

Krsnaa Diagnostics is India’s fastest growing differentiated diagnostic services provider both in Radiology and Pathology.