Eye care giant Dr Agarwal’s Health Care plans to raise Rs 3,000-3,500 crore through IPO

Dr Agarwal’s Health Care, an eye care services provider backed by Temasek Holdings and TPG, has filed preliminary documents with the capital markets regulator to raise an estimated Rs 3,000-3,500 crore through its initial public offering (IPO). This marks a significant move for the company, which is a leader in India’s eye care services market.

The IPO will consist of two main components:

Fresh issue of shares up to Rs 300 crore
Offer For Sale (OFS) of up to 6.95 crore equity shares by promoters and selling shareholders, including Arvon Investments Pte. Ltd, Claymore Investments (Mauritius) Pte. Ltd, and Hyperion Investments Pte. Ltd.

In addition, a portion of the IPO will be reserved for eligible employees, as detailed in the company’s draft red herring prospectus (DRHP). According to the draft papers filed, the fresh issue proceeds Rs 195 crore will primarily be used to reduce debt. The remaining funds will go towards general corporate purposes and potential unidentified acquisitions as part of the company’s expansion plans.

Dr Agarwal’s Health Care has built a strong reputation in India, offering a broad range of eye care services including:
Cataract surgeries
Refractive surgeries
Consultations
Diagnosis
Non-surgical treatments

The company also sells optical products, contact lenses, accessories, and eye care-related pharmaceutical items. According to a CRISIL MI&A report, Dr Agarwal’s Health Care commanded 25% of the total eye care service chain market in India during FY 2024.

As of March 31, 2024, Dr Agarwal’s Health Care operated 180 facilities, of which 165 were in India, with a significant presence in South India, particularly in Chennai, Hyderabad, and Bengaluru, followed by Western India. This extensive network has helped the company maintain its strong position in the eye care market.

On the financial front, Dr Agarwal’s Health Care reported:
Revenue from operations: Rs 1,332.15 crore in Fiscal 2024
Profit after tax: Rs 95.05 crore

The IPO is being led by several prominent investment banks, including Kotak Mahindra Capital Company, Morgan Stanley India Company, Jefferies India, and Motilal Oswal Investment Advisors.
With strong financial performance and ambitious expansion plans, Dr Agarwal’s Health Care’s IPO is expected to attract significant interest from both institutional and retail investors. The funds raised will not only help in reducing the company’s debt but also fuel future growth through potential acquisitions and broader market penetration.