Dr. Agarwal’s Health Care looks to capitalise on the untapped market potential to boost share
Dr. Agarwal’s Health Care Ltd, ahead of its ₹3,062 crore IPO launch, outlined its plans to expand its market share beyond the current 25 per cent by tapping into India’s growing organised eye care market. Through a strategic blend of organic and inorganic expansion and its successful hub-and-spoke model, the company aims to maintain its leadership in the sector.
The IPO, which opens on January 29 and closes on January 31, includes a ₹300 crore primary raise, with the remaining ₹2,762 crore from a secondary sale by existing shareholders. Of the IPO proceeds, ₹195 crore will go toward reducing gross debt, currently at ₹373 crore, while the rest will be used to fuel growth and establish new centres.
Founded in 1957 by Jaiveer Agarwal, Dr. Agarwal’s Eye Hospital was initially a single clinic, before being expanded by Dr. Amar Agarwal and his wife, Dr. Atiya Agarwal. Today, the company operates 209 hospitals across 10 countries, with a presence in India and Africa, which together represent nearly 3 billion people.
“This growth has been phenomenal,” said the Chairman of Dr. Agarwals Eye Hospitals group, Dr. Amar Agarwal, who has over three decades of clinical experience in eye care.
Dr. Adil Agarwal, Whole-Time Director & CEO, highlighted three reasons for pursuing the IPO: the immense growth potential in the ₹37,800 crore Indian eye care market, the ₹35,000 crore eyewear market, and the opportunity to raise capital. “Beyond accessing lower-cost funding, listing will increase our brand visibility and help us reach and serve more people. We believe in the company’s strong financial position, which offers great opportunities for investors,” he said.
Eye care market
The eye care market is split between organised chains and unorganised providers like clinics and community hospitals, among others. Currently, chains account for just 13-15 per cent of the market, while unorganized players hold 85 per cent. Dr. Agarwal’s Health Care leads the organised market with a 25 per cent share. The post- Covid shift towards quality, standardised care presents a growing opportunity for organised players.
The ₹1322 crore company’s hub-and-spoke model provides a competitive edge. In Chennai, for instance, 21 hospitals, including two tertiary centres, manage routine procedures at smaller centres and refer complex cases to larger hubs, allowing Dr. Agarwal’s to scale efficiently.
Over the past three years, Dr. Agarwal’s has seen impressive growth with a 38 per cent CAGR in revenue and a 42 per cent rise in EBITDA, with margins nearing 30 per cent.
Currently, the promoters own a 37.5 per cent stake in the company, with TPG Growth and Temasek holding the remaining 62.5 per cent. Post-listing, the promoters’ stake is expected to drop to around 32.5 per cent following the primary raise.
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