Dr Agarwal Health Care has just gotten the green light from SEBI for its IPO, a big deal in India’s bustling healthcare sector. The company has been working in the field since 1994 through its subsidiary Dr. Agarwal’s Eye Hospital. The company dropped its draft IPO papers back on 27 September 2024.
Dr Agarwal Health Care IPO Structure
Don’t mark your calendars just yet because the exact launch date for this IPO isn’t set yet. The IPO might hit the market towards the end of January 2025 or maybe even after the Union Budget in February, hinging on how the market vibes at that time. Analysts are buzzing that going post-budget there could be some government policy boosts.
The IPO’s structure includes a fresh issue of equity shares to the tune of INR 300 crore, alongside an offer-for-sale of 6.95 crore shares. Promoters and bigwigs like TPG and Temasek are set to offload some of their shares, providing an exit opportunity for early investors and injecting some liquidity into the mix.
Promoters have a 37.83% stake, with TPG and Temasek holding 33.75% and 28.18% respectively. This kind of heavyweight backing hints at strong faith in where Dr Agarwal Health Care is headed.
Financial Advisors and Bankers
For the IPO journey, Dr Agarwal Health Care has roped in heavy hitters like Kotak Mahindra Capital, Jefferies, Morgan Stanley, and Motilal Oswal as their merchant bankers. The company has been laying the groundwork since March 2024, aiming for a cool INR 300 crore raise in FY25. With these advisors at the helm, the company is set to navigate the IPO waters smoothly.
Growth Strategy and Business Overview
Dr Agarwal’s Health Care isn’t just another player in the eye care industry; It is leading the charge with 165 facilities in India and another 15 spread across the globe, including Africa. The Company offer everything from surgeries to selling optical gadgets and pharmaceuticals. Their focus on cutting-edge tech and treatments has carved them out a nice slice of the market, about 25% of the organized eye care segment in India as of FY24.
Funding from IPO proceeds, INR 195 crore, will settle some debts. The rest will be used for general corporate purposes and acquisitions to fuel further growth. The company is also eyeing expansion in Southeast Asia and the Middle East, aiming to widen its global footprint.
Financial Performance Snapshot
The financial performance for FY24 revealed some challenges, with net profit declining by 7.9% to INR 95 crore. This reduction was primarily due to an increase in tax liabilities, amounting to INR 45.52 crore, as opposed to a tax credit in the previous fiscal year.
However, there were positive developments as well. Revenue from operations saw a significant increase of 30.9%, reaching INR 1,332 crore. Additionally, EBITDA rose by 34% to INR 362.3 crore, and the profit margins improved slightly to 27.2%. These figures underscore the company’s operational strength and reflect a robust demand within the eye care sector.
Industry Trends and Market Mood
The eye care market in India is growing, expected to hit a 12–14% CAGR until FY28, expanding from INR 37,800 crore to possibly INR 65,000 crore. This growth is fueled by more people needing vision care, greater awareness, and more money in consumer pockets.
The market mood for healthcare stocks is pretty upbeat. The Nifty Health Care Index has risen by 40.78% in the last year, and Dr Agarwal’s Eye Hospital shares have soared by 124.15%. That’s a good sign for this IPO. Plus, their move towards digital health services could be a game-changer.
Final Thoughts
With a strong financial base, an expanding network, and international ambitions, Dr Agarwal Health Care is poised to make waves with its IPO. The proceeds will help clear debts, scale operations, and explore new horizons. For those with an eye on India’s healthcare sector, this IPO could be an intriguing watch.
But remember, the IPO road can be bumpy. As we creep closer to the launch, everyone from market watchers to potential investors will be keeping a close eye on developments. Given India’s healthcare growth trajectory and the demand for specialized services, Dr. Agarwal’s looks set to capitalize on future opportunities. For more information related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.
