Dr Agarwal’s Healthcare IPO opens on January 29 – Check Details

Dr Agarwal’s Healthcare IPO

Dr Agarwal’s Healthcare IPO: Price Band Set, Bidding Opens on January 29

Dr Agarwal’s Healthcare, a leading player in the eye care industry, is gearing up for its highly anticipated initial public offering (IPO) scheduled to open on January 29, 2025.

The company has announced a price band of Rs 382 to Rs 402 per share for the public offering. With a target to raise around Rs 3,027.26 crore, this IPO is poised to attract considerable interest from investors, both retail and institutional.

The company has also attracted backing from renowned global investors such as TPG and Temasek Holdings, which have significant stakes in the firm.

Dr Agarwal’s Healthcare is the parent company of Dr Agarwal’s Eye Hospital, a listed entity in India. As of now, Dr Agarwal’s Healthcare holds a 71.90% stake in Dr Agarwal’s Eye Hospital, which has a widespread presence in the healthcare sector.

The IPO will consist of a fresh issuance of shares worth up to Rs 300 crore and an Offer for Sale (OFS) of 6.78 crore equity shares, valued at Rs 2,727.26 crore, from promoters and other existing shareholders.

The selling shareholders in the OFS include Arvon Investments Private Limited, Claymore Investments (Mauritius) Private Limited, and Hyperion Investments Private Limited, which are affiliated with major investors like TPG and Temasek.

IPO Details and Timeline

The Dr Agarwal’s Healthcare IPO will open on January 29, 2025, and will close on January 31, 2025.

Investors will have the opportunity to place their bids within the specified price band of Rs 382 to Rs 402 per share.

Institutional investors can place their bids starting from January 28, 2025, in the anchor investor portion of the offering.

The shares from the IPO are set to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on February 5, 2025.

With the healthcare sector continuing to grow rapidly in India, this listing is expected to attract significant attention from investors, particularly given the company’s established market position and its impressive growth trajectory.

A Strong Stakeholder Base

Dr Agarwal’s Healthcare has attracted investment from some of the world’s most reputable private equity firms.

TPG, which owns a 33.75% stake through Hyperion Investments Pte, and Temasek, which holds 12.45% through Arvon Investments Pte and 15.73% through Claymore Investments (Mauritius) Pte, have been instrumental in supporting the company’s growth.

These global investors are expected to lend credibility to the IPO, making it an attractive opportunity for a broad spectrum of investors.

The promoters of Dr Agarwal’s Healthcare include a number of key individuals who have been pivotal in the company’s development.

These include Amar Agarwal, the founder and managing director, along with his family members Athiya Agarwal, Adil Agarwal, Anosh Agarwal, Ashwin Agarwal, Farah Agarwal, Urmila Agarwal, and Dr Agarwal’s Eye Institute, a significant entity within the company.

Their collective vision and leadership have helped Dr Agarwal’s Healthcare maintain its position as a leader in the Indian eye care market.

Eye Care Services: A Comprehensive Approach to Vision Health

Dr Agarwal’s Healthcare offers a wide range of eye care services through its network of 165 facilities in India and 15 locations globally, including nine centers in Africa.

These facilities provide a comprehensive suite of services aimed at addressing various eye health concerns.

The services include advanced cataract surgeries, refractive surgeries like LASIK, and a host of other medical and surgical treatments for conditions such as glaucoma, diabetic retinopathy, and macular degeneration.

In addition to medical treatments, the company also deals in spectacles, contact lenses, and a range of accessories, making it a one-stop destination for eye care needs.

Moreover, Dr Agarwal’s Healthcare also has a strong presence in the pharmaceutical segment, offering a variety of eye care-related products designed to improve and maintain eye health.

The company’s strong foothold in India’s eye care market is supported by a market share of around 25% as of FY24.

This makes it one of the most prominent players in the Indian ophthalmic healthcare sector, where there is an increasing demand for quality eye care services.

As the Indian population continues to grow, especially in the elderly demographic, the demand for advanced eye care is expected to rise, presenting a significant growth opportunity for Dr Agarwal’s Healthcare.

Use of IPO Proceeds: Strategic Investment Plans

The funds raised from this IPO will be strategically allocated to strengthen Dr Agarwal’s Healthcare’s financial position and facilitate future growth.

Of the total amount raised through the new share issuance, the company intends to use Rs 195 crore for debt repayment.

This will help reduce the company’s consolidated debt, which stood at Rs 384 crore as of July 2024, thereby improving its financial stability and reducing interest costs.

The remaining funds will be used for general corporate purposes, including investments in inorganic acquisitions.

Dr Agarwal’s Healthcare has expressed its interest in expanding its network both in India and globally, which could involve acquiring other eye care providers or healthcare facilities to further consolidate its position in the market.

Such strategic acquisitions could provide access to new patient bases and enhance the company’s geographical reach, especially in underserved areas.

Financial Performance: Revenue Growth Amid Profit Decline

In FY24, Dr Agarwal’s Healthcare witnessed a 30.9% year-on-year growth in revenue, reaching Rs 1,332 crore, up from Rs 1,018 crore in FY23.

This growth was driven by higher demand for its eye care services and an expansion of its offerings. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also increased by 34%, reaching Rs 362.3 crore, which is a positive indicator of the company’s operational efficiency.

Additionally, its EBITDA margin expanded by 0.6 percentage points to 27.2%.

However, despite the strong revenue growth, the company’s net profit declined by 7.9%, falling to Rs 95 crore in FY24 compared to Rs 103.2 crore in FY23.

This decline in profit can be attributed to factors such as increased operational costs, higher interest expenses, and investments in expansion initiatives.

Nevertheless, the company’s strong top-line growth and improving margins highlight its ability to scale effectively and manage its costs despite challenges.

The Road Ahead: A Promising Future

Dr Agarwal’s Healthcare is well-positioned to capitalize on the growing demand for eye care services in India and internationally.

The company’s diverse service offerings, strong brand recognition, and strategic investor backing make it an attractive investment proposition for the IPO.

Furthermore, the company’s expansion plans, both in terms of geographical reach and service capabilities, offer significant potential for long-term growth.

With the IPO opening on January 29, 2025, and shares slated for listing on February 5, 2025, investors will soon have the opportunity to participate in what is expected to be one of the most notable healthcare IPOs in recent times.

Given the increasing importance of eye care, both as a medical need and a growing business sector, Dr Agarwal’s Healthcare is well-positioned for a successful market debut and long-term success.

As the Indian healthcare industry continues to grow and evolve, Dr Agarwal’s Healthcare is expected to play a key role in shaping the future of eye care in India and beyond, making this IPO a significant event for both the company and the broader healthcare market.