IPO listed on 5 Feb'25
Dr. Agarwal's Health Care Ltd
Minimum Investment
₹ 14,070 / 35 shares
Grey market premium
₹ -4 (-1% premium)
Issue price
₹ 402
Listing price
₹ 402
Listing gains
0%
Listing on
Feb 4, 2025
Our Verdict:
Neutral
- Dr. Agarwal's Health Care Ltd (DAHCL) has demonstrated strong execution, driven by both organic growth and acquisitions. Among organized eye-care chains, it holds a 25% market share, with key unlisted competitors including Centre for Sight, Disha Eye Hospital, and ASG Hospital.
- The Indian eye-care market is one of the fastest-growing healthcare segments, projected to expand at a 12-14% CAGR between FY24-28, on par with oncology and orthopaedics. Organized eye-care chains currently account for ~15% of the market, while standalone clinics and hospitals dominate the space. This presents significant growth opportunities for larger players like DAHCL to scale and introduce advanced treatment facilities.
- The IPO appears fully priced at a P/E ratio of 128 based on FY24 earnings. Thus, in terms of valuation, the offer is relatively expensive compared to some of its healthcare peers.
- While DAHCL has strong growth potential, its valuation leaves limited upside in the near term. Given the current market volatility and uncertainty surrounding the Budget, long-term investors may find it prudent to keep this stock on their radar and wait for a more favourable entry point post-listing.
About the company
Founded in
19 Apr'10
Managing director
Dr Adil Agarwal
- DAHCL is a leading provider of end-to-end eye care services, offering a comprehensive range of solutions to meet all ophthalmic needs. Its services include cataract surgeries, refractive treatments, and other surgical procedures, as well as consultations, clinical investigations, and non-surgical treatments. The company also provides optical products and eye care-related pharmaceutical solutions.
- As of September 30, 2024, DAHCL operates 193 facilities across 14 states and 4 union territories in India, along with 16 facilities spanning 9 countries in Africa. The company generates 66% of its revenue from surgeries, 14% from consultations and diagnostics, with the remainder coming from optical lens sales and eye-care pharmaceutical products.
STRENGTHS
- Market Leadership: DAHCL is India’s largest eye care service chain by FY24 revenue, with approximately 1.7x the revenue of its nearest competitor. As of September 30, 2024, it operates the highest number of eye care facilities in the country, holding a 25% market share.
- Impressive Financial Growth: DAHCL has demonstrated robust financial performance with a compounded annual growth rate (CAGR) of 38% in operational revenue, 43% in EBITDA, and 48% in net profit between FY22–FY24.
- Asset-Light Operating Model: AHCL follows a hub-and-spoke network, where primary and secondary centres (spokes) handle basic diagnostics and select surgical procedures, while hub centres offer advanced surgical capabilities. This model maximizes patient volumes, improves accessibility, and optimizes the use of specialist resources. Additionally, by leasing most of its centres, the company reduces upfront capital expenditures, facilitating rapid expansion—from 91 facilities in FY22 to 193 across India as of September 30, 2024.
RISK FACTORS
- Geographical Concentration: A significant portion of DAHCL’s facilities are concentrated in Tamil Nadu (particularly Chennai), Maharashtra, and Karnataka, which together account for ~62% of its total facilities. Any adverse developments impacting these regions could negatively affect the firm’s business operations and results.
- Doctor Retainership Arrangements: DAHCL relies on retainership agreements to engage doctors. However, there is no guarantee that these doctors will not terminate their agreements prematurely. If the firm is unable to attract and retain doctors and other medical professionals, its business operations and financial performance may suffer.
- Low Return Metrics: DAHCL’s Return on Equity (RoE) and Return on Capital Employed (RoCE) are among the lowest when compared to its listed peers in the healthcare sector. However, direct comparisons may not be entirely accurate as peers do not operate exclusively in eye care services with a similar scale and size.
Issue details
Issue type
Mainstream
Issue size
₹ 3,027.26 crore
Fresh Issue
₹ 300 crore
OFS
₹ 2,727.26 crore
Price range
₹ 382 - 402
Lot size
35 shares
Issue Objective
The net proceeds from the fresh issue will be allocated towards:
- Repayment or prepayment of certain borrowings;
- Funding potential inorganic acquisitions (yet to be identified); and
- General corporate purposes.
Dates
Bidding open
29 Jan'25
Bidding close
31 Jan'25
Allotment date
3 Feb'25
Refund date
4 Feb'25
Listing
5 Feb'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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