Dr Agarwal's offer factors in all positives, open to growth strain
initial public offering of ₹3,027 crore comprising an offer for sale of ₹2,727 crore with the rest being a fresh issue that dilutes the promoter shareholding from 37.7% to 32.5%. Of the issue proceeds, ₹195 crore will be used to repay borrowings.
Business: Incorporated in 2010, Chennai-based DAHC is India's largest eye care service chain run by fourth-generation ophthalmologists. It has the highest number of eye care facilities in the country at 193, and 16 in Africa which contributes around 10% of the total revenues. At the end of September 2024, the company had 737 doctors and earned 66% of its revenues from surgeries, 13% from diagnosis and non-surgical treatments and 21% through the sale of eye care-related products, opticals, contact lenses and accessories.
DAHC has a 25% share of the Indian eye care service chain market. Its asset-light hub-and-spoke model has enabled it to grow through organic and inorganic expansion.
Financials & Growth Prospects: The company's net sales have grown at a compounded annual growth rate (CAGR) of 38% over the past three fiscals to ₹1,332 crore in FY24, while net profit has grown at 48.5% over the same period to ₹95 crore. The Ebitda margin steadily improved to 29.5% in FY24 but dropped to 27.3% for the six months ended September 2024. The company has been aggressive in inorganic growth — acquiring 21 smaller facilities in FY23 and 16 facilities in FY24. Consequently, the company's cash flow turned negative for FY24. Repayment of borrowings from the IPO proceeds is likely to
