India’s Largest Eyecare Services Provider Dr. Agarwal’s Health Care files DRHP for IPO

Temasek Holdings and TPG-backed eye care services Dr. Agarwal Health Care have filed their draft red herring prospectus (DRHP) with the market regulator, the Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).

The IPO with a face value of Re 1 per equity share is a mix of a fresh issue of up to Rs 300 crore and an offer for sale of up to 69,568,204 equity shares by the promoter and other selling shareholders. The offer also includes a subscription reservation for eligible employees.

The offer for sale consists of up to 2,253,913 equity shares by Dr. Amar Agarwal and up to 2,704,696 equity shares by Dr. Athiya Agarwal, up to 2,961,614 Equity Shares by Dr. Adil Agarwal, up to 5,242,630 equity shares by Dr. Anosh Agarwal, up to 230,035 equity shares by Dr. Ashvin Agarwal, up to 1,963,172 equity shares by Dr. Agarwal's Eye Institute, up to 7,083,010 equity shares by Arvon Investments Pte. Ltd., up to 16,148,150 equity shares by Claymore Investments (Mauritius) Pte. Ltd., up to 30,755,592 equity shares by Hyperion Investments Pte. Ltd., up to 112,696 equity shares by Farah Agarwal, and up to 112,696 equity shares by Urmila Agarwal.

The company, in consultation with the book-running lead managers, may consider a pre-IPO placement of specified securities that shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.\

The Offer is being made through the book-building process, wherein not more than 50% of the net offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the net offer shall be available for allocation to non-institutional bidders, and not less than 35% of the net offer shall be available for allocation to retail individual bidders.

The proceeds from the fresh issue to Rs 195 crore for repayment/prepayment, in part or full, of certain of its borrowings; general corporate purposes, and unidentified inorganic acquisition.

Dr. Agarwal Health Care, under the leadership of its Chairman, Dr. Amar Agarwal, who has over 35 years of experience in the eye care sector, offers a wide array of services. These include cataract, refractive, and other surgeries, consultations, diagnosis, non-surgical treatments, and the sale of optical products, contact lenses, accessories, and eye care-related pharmaceutical items.

According to a CRISIL MI&A Report cited in its DRHP, the company held about 25% of the total eye care service chain market in India during FY 2024. It compares with are ASG Hospitals and New Delhi Centre for Sight w.r.t geographic presence across India and Internationally.

Some of its key surgical capabilities include intraocular lens procedures, cornea transplantation, pinhole pupilloplasty, single pass four-throw pupilloplasty and LASIK surgeries. Interestingly, its doctors have developed and published research on surgical techniques including Glued IOL Technique, Scaffold IOL Extrusion Cannula Assisted Levitation (“ECAL”), Pre-Descemets Endothelial Keratoplasty (“PDEK”), Contact Lens Assisted Cross-Linking (“CACXL”), and Corneal Allogenic Intrastromal Ring Segments (“CAIRS”), among others. As of March 31, 2024, its doctors hold two patents for their innovations.

With an extensive operational track record, Dr. Agarwal Health Care aims to meet all patient needs throughout their eye treatment journey. As of March 31, 2024, its network consisted of 180 facilities out of which 165 facilities were in India with a majority concentration in south india particularly Chennai, Hyderabad and Bengaluru followed by the western india. Its integrated hub and spoke model have enabled deeper geographic penetration, allowing greater accessibility to patients while driving efficiency of critical resources across its network.

Amongst the listed and unlisted peers, it had the largest eye care facilities in India, serving patients through 667 doctors. In FY 2024, the company treated 2.13 million patients and performed 220,523 surgeries.

The company's facilities are categorized into Primary (non-surgical), Secondary (surgical), and Tertiary (super-specialty surgical) levels, with three Centers of Excellence (COEs). Its operations follow a "hub and spoke" model, ensuring scalability and accessibility for business growth.

As of March 31, 2024, its Indian network included 26 hubs (Tertiary Facilities, including three COEs) and 139 spokes (35 Primary and 104 Secondary Facilities). Internationally, it began operations in 2012 and had 15 facilities spread across nine African countries.

While its primary facilities provide initial eye care diagnosis and clinical investigation, the secondary facilities provide select services including cataract surgeries and clinical investigations and the tertiary facilities have super-specialty surgical capabilities including retinal, corneal, and refractive surgeries. The COEs also offer academic programs in ophthalmology and provide continuous training for our doctors, optometrists and counsellors.

Dr. Agarwal Health Care’s revenue from operations increased from 30.86% from Rs 1,017.98 crore in Fiscal 2023 to Rs 1,332.15 crore in Fiscal 2024. Profit after tax for Fiscal 2024 stood at Rs 95.05 crore.

The Indian eye care industry is projected to grow at a CAGR of 12% to 14% from the Financial Year 2024 to the Financial Year 2028. The size of the Indian eye care services industry was approximately ₹37,800 crore in Financial Year 2024, and is projected to grow to ₹55,000 crore – ₹ 65,000 crore by the Financial Year 2028.

Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, Jefferies India Private Limited, and Motilal Oswal Investment Advisors Limited are the book-running lead managers, and KFin Technologies Limited is the registrar to the offer.