Dr. Agarwal’s Healthcare IPO Review and Analysis – Should You Invest?

Dr. Agarwal’s Healthcare Limited is a leading player in India’s eye care industry, set to debut in the stock market with its highly anticipated Initial Public Offering (IPO). With strong fundamentals and a well-established brand, the company is generating buzz among the IPO investors. Let’s get into the details of the Dr. Agarwal’s Healthcare IPO, exploring its competitive strengths, financials, GMP (grey market price), reasons to invest, risk factors and get complete review and analysis.

About Dr. Agarwal’s Healthcare Limited

Founded in 2010, Dr. Agarwal’s Healthcare is a trusted name in comprehensive eye care. The company provides a range of services, including cataract surgeries, LASIK procedures, glaucoma treatments, retinal surgeries, and corneal transplants. With over 193 facilities across India and 28 hubs under a scalable hub-and-spoke model, the company is the largest private eye care provider in India.

In the six months leading to September 30, 2024, the company served over 1.15 million patients and conducted 140,787 surgeries, underscoring its clinical expertise and operational scale.

Dr. Agarwals Healthcare IPO Review and Analysis - Should You Invest

Dr. Agarwal’s Healthcare IPO Issue Details

  • IPO Date: January 29, 2025 – January 31, 2025
  • Price Band: ₹382 – ₹402 per share
  • Lot Size: 35 shares
  • Issue Size: ₹3,027.26 crore
    • Fresh Issue: ₹300 crore
    • Offer for Sale (OFS): ₹2,727.26 crore
  • Listing: BSE and NSE
  • Promoters’ Holding (Post-IPO): Reduced to 37.72%.

IPO Timeline:

  • Basis of Allotment: February 3, 2025
  • Refunds Initiation: February 4, 2025
  • Listing Date: February 5, 2025

The proceeds from the fresh issue will primarily fund debt repayment and acquisitions, strengthening the company’s financial position.

Competitive Strengths

  1. Largest Eye Care Network: Dr. Agarwal’s Healthcare boasts the largest private eye care network in India, with facilities in both metropolitan and non-metropolitan regions.
  2. Comprehensive Services: The company offers end-to-end solutions for eye care, including consultations, surgeries, optical products, and pharmaceuticals.
  3. Asset-Light Hub-and-Spoke Model: Its efficient operating model allows the company to scale operations while maintaining high profitability.
  4. Strong Brand Equity: With decades of clinical excellence and surgical innovation, Dr. Agarwal’s is a household name in eye care.
  5. Leadership by Doctor-Promoters: The company is led by experienced ophthalmologists, ensuring medical expertise is central to decision-making.

Financial Performance

Period Ended 30 Sep 2024 31 Mar 2024 31 Mar 2023 31 Mar 2022
Assets 3,393.41 2,752.82 1,825.17 1,026.13
Revenue 837.94 1,376.45 1,031.49 713.78
Profit After Tax 39.56 95.05 103.23 43.16
Net Worth 1,502.67 1,337.68 627.83 212.34
Reserves and Surplus 1,509.11 1,365.86 652.63 236.27
Total Borrowing 373.68 387.79 356.18 290.18
Amount in ₹ Crore

Sep-2024 column is for 6 months ending Sep-2024

The company has demonstrated consistent growth in revenue and profitability, although a dip in ROE highlights the need for efficient capital utilization post-IPO.

P/E Ratio Compared to Peers

Dr. Agarwal’s Healthcare IPO Price Band is ₹ 382 to ₹ 402 and this is at a P/E ratio of 130.4x. Its peers like Aster DM Healthcare    is trading at P/E 136x (Highest) and Narayana Health at P/E 33x (Lowest) and industry average is 82x. Hence the IPO price is over priced.

Reasons to Invest in Dr. Agarwal’s Healthcare IPO

  1. Leadership in a Niche Market: With a focus on eye care, the company dominates a segment poised for growth in India.
  2. Scalability: Its asset-light model and acquisition-driven growth strategy enable rapid expansion.
  3. Strong Financials: Consistent revenue growth and profitability underscore a robust business model.
  4. Experienced Management: Led by seasoned medical professionals, the company has a proven track record.

Risk Factors

  1. High Valuation: The premium P/E ratio compared to peers may limit upside potential in the short term.
  2. Regulatory Risks: Changes in healthcare regulations could impact operations.
  3. Competition: Increasing competition in the healthcare sector may affect market share.
  4. Debt Levels: The IPO contains OFS (which goes to selling share holders only) and Fresh issue. While a portion of IPO proceeds will be used for debt repayment, existing liabilities remain substantial.

Dr. Agarwal’s Healthcare IPO GMP (Grey Market Price)

As of January 24, 2025, the Dr. Agarwal’s Healthcare IPO commands a grey market premium (GMP) of ₹80 per share, indicating strong demand among retail and HNI investors.

How to Apply for Dr. Agarwal’s Healthcare IPO

Investors can apply via ASBA (Application Supported by Blocked Amount) through their bank or brokers. UPI-enabled applications are available for retail investors.

Steps to Apply:

  1. Log in to your trading account or bank’s IPO section.
  2. Select “Dr. Agarwal’s Healthcare IPO.”
  3. Enter bid details and confirm the application using UPI/ASBA.

Dr. Agarwal’s Healthcare IPO Review – Should You Invest?

Dr. Agarwal’s Healthcare IPO offers an excellent opportunity to invest in India’s largest eye care provider with significant growth potential.

However on the negative side, the IPO price is overpriced beyond the regulatory risks, high competition etc.

Is it Good or Bad for Investment – Should you buy or not – Invest with a long-term perspective. Retail investors seeking quick returns on IPO listing date should avoid such IPOs due to the high valuation.

Disclaimer: This analysis is for informational purposes only. Consult your financial advisor before making investment decisions.

Suresh KP

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