Dr. Agarwal's Health Care IPO: High valuation calls for caution
Subscribe to enjoy similar stories. Dr. Agarwal's Health Care Ltd's initial public offering (IPO) represents a milestone for India’s specialized healthcare sector.
With a strong operational model, robust financials, and a clear growth strategy, the company is eyeing the pole position in the expanding eye care market. The public issue, which combines a fresh issue of ₹300 crore and an offer-for-sale (OFS) of ₹2,727 crore, aims to raise a total of ₹3,027 crore. With a valuation pegged at ₹12,810 crore at the upper price band of ₹402 per share, the company is digging in for a new phase of growth and consolidation in the burgeoning segment.
However, the high valuation and the significant OFS component necessitate a cautious approach for potential investors. Founded in 2010 and headquartered in Chennai, India’s largest eye care chain by revenue and network size has laid out an ambitious roadmap for expansion. With 209 facilities, including 193 centres in India and 16 across Africa, the company has built an extensive reach using its innovative hub-and-spoke model.
In 2023-24 alone, the company added 45 new centres, and it plans to continue this trajectory with a mix of greenfield and brownfield projects. A significant focus is on penetrating underserved regions in northern and eastern India, along with expanding its footprint in Africa. The company is also planning to merge with its listed subsidiary, Dr Agarwal's Eye Hospital Ltd, within the next 12 months.
This merger aims to streamline operations, eliminate redundancies, and enhance shareholder value. By consolidating its operations under a single umbrella, the company seeks to achieve greater operational efficiency and create a more cohesive brand identity. The company,
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