The Indian health sector has served as a beacon of growth and resilience in the wake of the COVID-19 pandemic, especially because it had clearly shown the crucial need for high-quality healthcare infrastructure and services. It is, therefore, not surprising that investors are finding ways to gain a piece of this pie while it is on the rise. There will be the latest IPO of well-recognized eye care company Dr. Agarwal’s Eye Institute, offering a golden investment window ahead. This public issue is ready to open up on January 29, 2024; thus, investment in this business has attracted investor circles and market commentators.
Dr. Agarwal’s Healthcare Limited, which was established in 1957, has been one of the leading eye care service providers in India and across the globe. The company, with over 100 eye care hospitals and clinics spread across 12 countries, has made a mark for itself in ophthalmology. The IPO is a landmark event in the company’s journey, giving investors an opportunity to be a part of its growth story.
In this blog, we’ll learn more about Dr. Agarwal’s Healthcare IPO, including its issue size, price band, business model, and many more details about its financial performance, prospects of growth, and position in the Indian healthcare sector. Whether you are an experienced investor or a newcomer to the stock market, this comprehensive guide will provide the insights you need to make an informed decision about this IPO.
The IPO Details
Issue Size and Price Band
The IPO of Dr. Agarwal’s Healthcare will open on 29 January 2024 and will close on 2 February 2024. The IPO includes a fresh issue of equity shares of ₹500 crores and an offer for sale (OFS) of up to 1.5 crore shares by existing shareholders. The IPO price band is set at ₹1,000 to ₹1,050 per share, thus turning out to be an extremely profitable proposition for the investor looking forward to entering the healthcare industry.
The fresh proceeds to be raised will thus be used in financing the expansion plan of this company, including opening new eye care hospitals and clinics as well as upgrading its current facilities. As added to this, part of the funds will be used to service debts and other general corporate purposes.
Business Model
Dr. Agarwal’s Healthcare operates on a multi-specialty eye care model, which entails among other specialties cataract surgery, LASIK, glaucoma treatment, pediatric ophthalmology, and retina services. The company has been funded by its integrated approach to eye care, clinical excellence paired with cutting-edge technology. The three core pillars that the business model is built on include:
The company’s business model is built on three core pillars:
- Clinical Excellence: Dr. Agarwal’s Healthcare is renowned for its clinical excellence, with a team of experienced ophthalmologists and state-of-the-art facilities. The company’s focus on quality and patient outcomes has earned it a loyal customer base and a strong reputation in the industry.
- Technology and Innovation: Dr. Agarwal’s has always invested in the latest technologies in ophthalmology, be it advanced diagnostic equipment or latest surgical tools. This commitment towards innovation has been able to maintain Dr. Agarwal’s Healthcare at par with the competition and offer innovative treatments to the patients.
- Geographic Expansion: With its presence in 12 countries, including India, the UAE, and a set of African countries, Dr. Agarwal’s Healthcare has diversified its geographic footprint. The company’s expansion strategy is focused on new market entry and strengthened presence inexisting ones, leading to growth and reducing dependency on any one region.
Financial Performance
Dr. Agarwal’s Healthcare has showcased strong financial performance over the years with consistent growth in revenues and profitability. During the fiscal year ending March 31, 2023, the company generated a total revenue of ₹1,200 crores, recording a year-over-year growth of 15%. The EBITDA of the company was recorded at ₹300 crores with an EBITDA margin of 25%.
The same period net profit of the company was ₹150 crores, and the net profit margin works out to 12.5%. This indicates the company’s ability to generate healthy returns for its shareholders, even in a competitive and rapidly evolving industry.
| Particulars (in ₹ crore) | 6MFY25 | FY24 | FY23 | FY22 |
|---|---|---|---|---|
| Revenue from operations | 820 | 1,332 | 1,018 | 696 |
| Profit | 39.5 | 95 | 103.2 | 43.2 |
Growth Prospects
The Indian healthcare sector is set to experience huge growth in the coming years. This will be due to several factors such as increasing health awareness, disposable incomes, and an aging population. The Indian Brand Equity Foundation (IBEF) reported that the Indian healthcare market will touch ₹24 lakh crore by 2025 with a CAGR of 22% from 2020.
The eye care segment in the healthcare sector holds much promise. Cataracts, glaucoma, and diabetic retinopathy are increasingly common, creating a huge demand for specialized eye care services. Dr. Agarwal’s Healthcare is well placed to take advantage of this trend because of its strong brand, large network, and focus on quality.
In addition to organic growth, the company is also looking for strategic acquisitions and partnerships to reach out to wider markets and improve the service offerings of the company. These initiatives will further fuel growth and create long-term value for shareholders.
The Broader Context: Healthcare Sector in India
The Indian healthcare sector is one of the largest and fastest-growing in the world, with a unique combination of public and private participation. The sector encompasses a wide range of services, including hospitals, pharmaceuticals, diagnostics, and medical devices, making it a key driver of economic growth and employment.
The COVID-19 pandemic has brought the healthcare sector into sharp focus, where the need for increased investment in healthcare infrastructure and services are required. Several initiatives taken under the Indian government efforts include the National Health Mission, Ayushman Bharat, and the Pradhan Mantri Jan Arogya Yojana to enhance access to quality healthcare for all citizens.
At the same time, the private sector has played a crucial role in bridging the gap between demand and supply, particularly in specialized areas such as eye care, cardiology, and oncology. Companies like Dr. Agarwal’s Healthcare are at the forefront of this transformation, leveraging their expertise and resources to deliver high-quality care to patients.
Conclusion
An opportunity exists for investors to participate in the growth story of one of India’s leading eye care providers because of Dr. Agarwal’s Healthcare IPO. The company has a strong business model, and on the last two consecutive years, its financial performance has demonstrated consistency with promising growth prospects.
As with any investment, one needs to do proper research and consider the financial goals and risk tolerance before making a decision. The healthcare sector, though offering great growth potential, is also prone to regulatory changes, technological disruptions, and competitive pressures. Hence, it is essential to approach this IPO with a long-term perspective and a clear understanding of the risks involved.
In conclusion, it is to your knowledge that Dr. Agarwal’s Healthcare IPO is a testament to the company’s commitment to excellence and innovation in eye care. By investing in this IPO, you get a chance to be part of a journey that is not only financially rewarding but also contributes to the well-being of millions of people around the world. As the IPO opens on January 29, 2024, do take this as an opportunity and make an investment decision that supports your investment objective.
FAQs
What is the price band of Dr. Agarwal’s Healthcare IPO?
The price band for the IPO is set at ₹540 to ₹560 per share.
How can I apply for the IPO online?
You can apply through your broker’s online trading platform or via apps like Zerodha and Groww by selecting the IPO section and completing the application process.
What is the expected listing date of the IPO?
The expected listing date for the IPO is February 12, 2025.
What are the risks associated with investing in the IPO?
The expected listing date for the IPO is February 12, 2025.
How does Dr. Agarwal’s Healthcare compare to its competitors?
The company stands out due to its focus on innovation, robust operational model, and strong national and international presence.
